No one wants to be the target of identity theft, and yet, despite consumer awareness and prevention practices, in 2008 ten million people were victimized. It seems like everyone should be overjoyed at programs to curb this threat from the creditor's side.
Not so. Some organizations, such as the American Medical Association, feel that their members should be exempt from developing and implementing written identity theft prevention and detection measures.
Resistance from the AMA has been so strong that the deadline for putting the Red Flag Rules into practice has been delayed 3 times since it's inception in November 2007. The new deadline is November 2009.
Banks and other credit issuing entities also object to monitoring the 26 red flags designed to prevent anyone from using another person's identity - for gaining credit, for getting a job, for renting an apartment, or for obtaining medical care under another's insurance policy.
Why? They feel that the new rules are "excessive and overly burdensome." Huge banks will probably have no trouble with compliance, but smaller organizations without a large staff may have to hire 3rd party companies to carry out this function. Either way, implementing the Red Flag rules will cut into profits.
One objection from the AMA is that physicians should not be classified as "creditors," even though they grant credit when they accept payments for care, or when they wait for payment until an insurance company responds to billings.
Lawmakers are not heeding this argument, because they are particularly concerned with "medical identity theft." Not only can thieves obtain medical care using someone else's insurance, the resultant medical records could be medically dangerous to the person whose identity was stolen.
Coming into compliance will definitely prevent "instant credit," because checking some of the 26 Red Flags will require a little research. First, it will be necessary to obtain and actually read a credit report. The first red flag will be the inability to obtain that report due to a credit freeze. Next would be a fraud alert placed on the report.
From there, credit issuers will need to examine the report for inconsistencies when compared to the application for credit. Some, such as checking the borrowers social security number against his date of birth, will require further effort.
To read the entire list of 26 Red Flag Triggers, visit
Bankrate.com http://www.bankrate.com/brm/news/Financial_Literacy/identity_theft/red_flags_a1.asp?caret=92g
Meanwhile, since the rules are not yet in effect, check your own credit report today... You could be a victim and not even know it.
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