What is the Red Flag Ruling?
The Red Flag Ruling requires automotive dealerships to implement
policies and procedures to prevent fraud due to identity theft.
• The Ruling Implements Sections of 114 and 315 of the FACT Act of 2003
This section of the Fair and Accurate Credit Transactions Act contains 26 “red flags”, many of which are applicable to automotive dealerships
• A “red flag” is a pattern, practice or specific activity that indicates the possible
existence of identity theft
• The Red Flag Ruling requires dealerships to identify any red flags that apply, have a
process in place to detect red flags, outline proper responses to those red flags detected, train all applicable staff and to update the program on a regular
What is Identity Theft?
Identity theft occurs when someone uses personal identifying
information belonging to someone else to commit fraud or other
Identity Theft Prevention Program
Your dealership has implemented a comprehensive program in
order to achieve compliance with the Red Flag Ruling. It
- Written Identity Theft Prevention Policies & Procedures Manual - Training for Applicable Staff
- NCC’s Proof of Identity Solution - NCC’s Authentication Solution
The compliance program requires 4 key elements:
Identify, Detect and Respond to Red Flags and Update the program
to keep pace with the current methods of Identity Theft.
• Management will be primarily responsible for the identification
of the red flags, keeping staff trained and updating the
Identify Red Flags
There are 26 potential Red Flags identified in the ruling.
However, only certain Red Flags pertain to this dealership.
When your training is complete you should be able to
recognize and respond in the proper manner to the identified
Red Flag Identification
The Red Flags on this screen require manual observation. Please slow down and take the time required to examine all identification and documents provided by the applicant(s). Proper responses will be outlined in the Training Guides.
SUSPICIOUS PERSONAL IDENTIFYING INFORMATION OR DOCUMENTS
Using the applicant’s driver’s license, look for the following red flags…
Documents provided for identification appear to have been altered or forged.
The photograph or physical description is not consistent with the appearance of the customer presenting the identification.
Other information (age, height, eye color) on the identification is not consistent with information provided by the person applying for credit or the person presenting the identification.
NCC’s Proof of Identity Solution
The dealership has selected to use NCC’s Proof of Identity Solution as the first of two additional tools to aide in responding to a detected Red Flag.
The NCC Proof of Identity Solution is a web based system that matches the information provided from the consumer against the credit bureau's data and other outside data sources. Results will show if information matches, is a partial match or no match.
Personal identifying information provided is inconsistent when compared against external information sources.
An address does not match any address in the consumer credit report
The Social Security Number (SSN) has not been issued, is newly issued or is listed on the SS Administration's Death Master File
The SSN issuance date pre-dates the applicants birth date Applicant is unable to identify the SSN state of issuance
Personal identifying information provided by the customer is not consistent with other personal identifying information provided by them, such as the lack of correlation between the SSN range and date of birth.
Personal identifying information provided is associated with known
fraudulent activity as indicated by internal or third-party sources.
The address on an application is fictitious, a mail drop, a prison or has been associated with fraudulent activity
The phone number is invalid, or is associated with a pager or answering service
The social security number has been reported as used by multiple individuals or has been used in fraud
ALERT, NOTIFICATION OR WARNING FROM A CONSUMER REPORTING AGENCYAn active duty alert is included with a consumer report
A fraud alert is included with a consumer report
A consumer reporting agency provides a notice of credit freeze in response to a request for a consumer report
A consumer reporting agency provides a notice of address discrepancy (a substantial difference between the address for the consumer that the user provided to request the consumer report and the address in the agency's file for the consumer)
A consumer credit report indicates a pattern of activity that is
inconsistent with the history and usual pattern of activity of an
applicant, such as:
A recent increase in the volume of credit inquiries
An unusual number of recently established credit relationships
An account that was closed for cause or identified for abuse of account privileges by a financial institution or creditor
A material change in the use of credit, especially with respect to recently established credit relationships
NCC’s Authentication Solution
As the second tool to aide in responding to a detected Red Flag, the dealership has selected NCC’s Authentication Solution.
This solution is a web based system that generates unique non-credit bureau based questions for each applicant. The applicant’s ability to correctly answer the four questions will assist you in determining their true identity.