3.118- What are the Parties subject to “red flag” rules?

The SEC’s Red Flag Rules applicability extends to entities governed by the SEC itself. Additionally, these entities must be eligible to be deemed as either financial institutions or creditors in accordance with the FCRA hence it imposes an obligation on these institutions and creditors that are in charge of preserving covered accounts to take steps to prevent identity theft such as endorsing identity theft schemes. It should be known that approximately nine million Americans have been a victim of such an offense so this necessitated the need for a solution. These Red Flag Rules were the result of the Federal Trade Commission’s(FTC) efforts to take steps to eradicate or at least curtail identity theft and this is not astonishing keeping in mind the number of aggrieved citizens. Other government agencies have also contributed to the formation of these rules.