The Federal Trade Commission (FTC) recently adopted rules on identity theft "red flags" (i.e., warning signs) pursuant to the Fair and Accurate Credit Transactions Act (FACTA) of 2003.  Section 111 of FACTA defines "identity theft" as "fraud committed using the identifying information of another person."

Under the Red Flags Rule, every financial institution and "creditor" is required to establish an Identity Theft Prevention Program tailored to its size, complexity and the nature of its operation.  The program must contain reasonable policies and procedures to:

• Identify relevant Red Flags for new and existing "covered accounts" and incorporate those Red Flags into the program;

• Detect Red Flags that have been incorporated into the program;

• Respond appropriately to any Red Flags that are detected to prevent and mitigate identity theft; and

• Ensure the program is updated periodically to reflect changes in risks to customers or to the safety and soundness of the creditor from identity theft.

To conform to these new rules, the Watauga City Council approved an Identity Theft Prevention Program which was implemented on November 1, 2008.

• City of Watauga Identity Theft Prevention Program

• Ordinance Establishing the Identity Theft Prevention Program