A new federal law that went into effect Saturday requires banks to have a program that helps detect, prevent and mitigate identity theft.
The Fair and Accurate Credit Transaction Act – FACT Act - Identity Theft “Red Flags” Provision requires banks to take additional steps to ensure that people are who they say they are.
With the new rules may come new questions from a bank, even if you’ve been a client there for a long time. What will change? You may be asked to provide proper identification or information to identify yourself, especially when conducting account maintenance, changing your address and opening new accounts.
Why do you need to do this when you have been a client so long? By asking you questions and verifying your information, banks can confirm that they are dealing with you, their client in order to help protect you from being the victim of identity theft.
Banks, along with car dealerships, credit card companies, public and private utility companies, government and municipalities including nonprofits are all subject to these rules and increased attention to prevent identity theft.
Activities that constitute a ‘fed flag’ warning include information provided by the client that does not match the information that is in that person’s bank file; a driver’s license, passport or other government issued photo card provided for identification appears to be altered or forged; physical description on an ID does not match the appearance of the person; if the credit bureau report indicates address discrepancy.
These rules are in place to provide protection to clients. Though it may feel like an inconvenience to be required to present your ID or provide identifying information to your long-time banker, it will provide a layer of protection for the detection of identity theft such as account takeover.
The changes are designed to make sure you don’t become one of the 27 million people impacted by identity theft.