As someone heavily engaged with the market and our clients discussing Red Flag Rule compliance, Red Flag guidelines, etc…this question has come up over and over again. You’d think by now I’d have a simple, clever, and strategically created product name to throw out there. Well, I don’t, and here’s why: we had Red Flag relevant products before Red Flags were in vogue. So, why didn’t we just rename them under the Red Flag brand? Because honestly, that would border on irresponsibility. Let me explain briefly…
If you recall, the Red Flags Rule requires that covered institutions employ a written and operational Program that addresses the four mandatory elements of:
•Identifying Red Flags applicable to covered accounts and incorporating them into the Program;
•Detecting and evaluating the Red Flags included in the Program;
•Responding to the Red Flags detected in a manner that is appropriate to the degree of risk they pose; and
•Updating the Program to address changes in the risks to customers, and to the financial institution’s or creditor’s safety and soundness, from identity theft.
You read in these requirements words like “applicable” and “appropriate” and “degree of risk.” You don’t read words like “use this tool” or “detect this specific set of conditions.” My point here is that, over the past year, we’ve been working with our clients to map in the “appropriate” and “applicable” set of products and services to allow them to become Red Flag compliant. These products and services range in data leverage and provision, predictive power, decisioning, and of course, cost. That is a good thing, as our clients require individualized tool sets and processes based on their serviced market, gathered information, consumer relationships, products offered, and risk associated with all of those factors.
We don’t offer an unlimited or overwhelming number of Red Flag relevant products, but we do offer a diverse enough set that has afforded our clients an opportunity to select the best fit. Whether you choose to adopt Experian as your Red Flag partner or another service provider, keep in mind that one size does not fit all, and be wary of those claiming to be just that.
As Red Flag examinations start rolling out in the coming months, there will be a focus on ensuring that your programs are comprehensive and effective. Examiners will be looking at your programs, not your service provider. Be sure to collaborate with your partners to meticulously apply the best solution. At Experian, we’ve taken this collaborative approach with each of our clients, and have employed products ranging from our robust Precise ID SM consumer authentication platform to our Fraud Shield SM risk warning product. Time spent up front in identifying your Red Flag requirements and working with your service provider to determine the best course of action will pay dividends down the road, and ensure you implement a compliant process once….not twice.