Study: Most U.S. banks not yet compliant with identity theft rules
Written on September 12, 2008
Less than one-third of U.S. banks will be fully compliant with the U.S. government’s identity theft prevention rules by the Nov. 1 deadline, according to a new study.
With the deadline looming, research by Needham, Mass.-based TowerGroup found that many U.S. financial services institutions have mistakenly considered compliance with the “Red Flags Rules,” as they are known, as merely an administrative exercise.
As a result, according to the research, most banks will need to take rapid action to meet the more stringent regulatory demands.
Those demands, designed for banks by the government to help identify and prevent fraud related to consumer identity theft are known as “Red Flags Rules.” The rules were issued in November 2007 and are titled in full, “Identity Theft Red Flags and Address Discrepancies Under the Fair and Accurate Transactions Act of 2003.”
The new requirements focus on how banks need to implement technological and procedural frameworks to support ongoing efforts to detect and prevent fraud.
U.S payday advance lender. financial institutions will spend more than $200 million on both internally developed and vendor-supplied technology to comply with the rules, according to the TowerGroup’s estimate.
Filed in: business.