Fighting identity theft

Fighting identity theft

Federal law requires businesses to implement 'red flag' programs
May 01, 2009

WASHINGTON — A federal rule requiring businesses, including veterinary practices, to have a written program to spot identification theft and take appropriate steps to respond will begin to be enforced this month.

The Federal Trade Commission (FTC) and the federal financial regulatory agencies developed the Red Flags Rule in 2003, but it did not go into effect until November 2008. Due to various entities not realizing that they had to come into compliance, enforcement did not begin until this month, according to the FTC.

The rule requires creditors, including health-care facilities, and financial institutions to develop written programs to identify the warning signs of ID theft, spot them when they occur and take appropriate steps to respond to those warning "red flags."

It is designed to reduce the overall incidence and impact of identity theft, according to the FTC.

In 2007, Consumer Sentinel, the complaint database developed and maintained by the FTC, received more than 800,000 consumer fraud and identity-theft complaints involving losses of more than $1.2 billion.

Credit-card identity theft tops the list as the No. 1 means of identity theft, at 23 percent, according to Consumer Sentinel. Using someone else's identity to falsely obtain utilities or phone service comes in next at 18 percent, followed by falsely gaining employment, bank accounts, government documents or benefits and loans.

While veterinary practices already are required to implement data security practices, the Red Flag Rule picks up where data security leaves off, the FTC states.

"It seeks to prevent identity theft by ensuring that your business or organization is on the lookout for the signs that a crook is using someone else's information, typically to get products or services from you with no intention of paying," the agency warns. "That's why it's important to fight the battle against identity theft on two fronts: First, by implementing data security practices that make it harder for crooks to get access to the personal information they use to open or access accounts, and second, by paying attention to the red flags that suggest that fraud may be afoot."

While identity theft is a problem across the country, the top five hardest-hit states are Arizona, California, Nevada, Texas and Florida, according to the FTC. The top five hardest-hit cities are Napa, Calif.; Madera, Calif.; Greeley, Colo.; Brownsville-Harlingen, Texas and McAllen-Edinburg-Mission, Texas.

For more information on the Red Flags Rule or to download a how-to guide, titled "Fighting Fraud with the Red Flags Rule: A How-To Guide for Business," visit

In addition, the American Veterinary Medical Association (AVMA) plans to offer webinars with an outside specialist to help veterinarians come into compliance.