Beginning June 1st, 2010, a business that extends credit is required to develop a plan to identify and prevent identity theft. The Federal Trade Commission (FTC) is responsible for enforcement of this rule.
The requirement to develop a written plan applies to obvious institutions that extend credit, such as banks and credit card companies, but also to businesses that perform services then bill later, such as a law firm.
What does that mean? According to FTC, the written plan must provide how to identify signs of identity theft. As expected, each business is different and thus, the signs of identity theft can be different for each business. An obvious example is someone paying with a credit card and the identification provided appears fake. Your business is required to provide guidance on how to identify a fake ID. In reality, think about your business and write down what you would do to prevent theft and how you would deal with the situation if it occurs.
The written plan does not need to be filed with the FTC and, unless a complaint is filed with the FTC, there is little likelihood of being asked for one. However, because it is now required, not having an implemented plan on file could result in a fine.
Disclaimer:
This information does not constitute the rendering of legal, accounting or other professional services by Pete Benenati or Benenati Law Firm, PC. This information is not intended to create or provide an attorney-client relationship. Although care is taken to present the material accurately, any implied or actual warranties as to any materials herein are hereby disclaimed along with any liability with respect thereto.