Red Flag

[goodone414]

How many dealers are Red Flag ready, in compliance now for Red Flags Rule?

[dafuzz1956]

We are but you do know that requirement wse postponed until May '09

[goodone414]

Originally Posted by dafuzz1956

We are but you do know that requirement wse postponed until May '09

Yes Thank You. I am aware of the compliance postponment until May '09, however I believe you still have to have a written policy in place and in use by Nov 1st 2008.

[XDCX]

Originally Posted by goodone414

How many dealers are Red Flag ready, in compliance now for Red Flags Rule?

Thanks for starting a great thread.

My goal for forum is that it becomes a place where issues like this are discussed and we can all benefit from everyone's experience.

That said, my bet is that the Red Flag Requirement has dropped off the Radar Screen of most dealers. Hopefully we'll get more input.

[dafuzz1956]

Our Office Mgr went to alll of the Red Flag mtgs and worked very hard to have our policy written and she was ready to rock end of oct, so we are locked an loaded.

[XDCX]

I thought of this thread when I saw the e-mail from CFC that detailed their new Retail Verification Process which begins 12-10-08.

For customers with a FICO score below 680, CFC will verify all of the following information before making a credit decision:

• Address
• Phone
• References
• Employment
• Income

The Red Flag rules go into effect on May 1, 2009 - it's not too far away.

[JimD]

bear in mind folks, the RFR (though written into the FACT Act), also applies to cash transactions. Identities must be verified in ALL transactions. (Though in cash transactions, it actually falls under the auspicies of the Patriot Act, OFAC etc. Still, many of the same "flags" as are specified by RFR, will apply in cash transactions as well.)

[XDCX]

Originally Posted by JimD

bear in mind folks, the RFR (though written into the FACT Act), also applies to cash transactions. Identities must be verified in ALL transactions. (Though in cash transactions, it actually falls under the auspicies of the Patriot Act, OFAC etc. Still, many of the same "flags" as are specified by RFR, will apply in cash transactions as well.)

Jim:

Thanks for the update.

Do you know which Government Agency is going to be responsible for enforcing the Red Flag Rule?

I remember posting a news report last year where a dealer faced a lawsuit claiming age discrimination. I was surprised to learn that the case was being handled by the U.S. Equal Employment Opportunity Commission as part of the Federal Age Discrimination in Employment Act.

The thought of being sued by an agency of the U.S. Government is sobering - they've got deep pockets when it comes to paying for attorneys.

[JimD]

RFR falls under the FTC. Since Identity Theft, is the fastest growing crime in the nation, and in scenarios involving credit it would many times also mean wire-fraud, the FBI and/or Treasury could very well be involved as well.

As you said above, the resources which could/would be brought forward, are formidable at the least.

Most damning for dealerships, is that a single complaint could result in an investigation and thorough auditing of the records. (Both deals completed and dead deals.) In better than 90% of the dealerships I know of (as of Jan 1 at any rate), they are not in compliance with RFR and the resulting suits would quickly become Class Action, for exposing the consumer(s) to unnecessary risk due to the non-compliant status.