SIKESTON -- Consumers have likely seen a few more requirements when applying for credit recently, and they will definitely see more tightening over the next several months, as businesses work to comply with rules set forth by the Federal Trade Commission.
The FTC is enforcing a "Red Flags Rule," which requires creditors and financial institutions to have identity theft prevention programs in place. The rules were developed pursuant to the Fair and Accurate Credit Transactions Act of 2003.
"I think this is a big benefit for consumers, said Judd Rousseau, the chief fraud officer for Identity Theft 911. "As big of a problem as identity theft is -- the losses are in the billions each year -- and a lot of the onus is put on the consumer. I think that, with the Red Flag ruling, (businesses) will realize there is a problem and they have a responsibility and duty to be aware of it and stop it at the point of the application."
Rousseau has worked in corporate and retail security, as well as fraud investigations, for more than 20 years. A certified fraud specialist, he is nationally recognized as an expert on identity theft, fraud investigation and prevention, and the credit industry.
Businesses the FTC is most concerned about, said Rousseau are smaller, such as car dealerships and furniture stores, that are notorious for becoming victims of credit card fraud by cheating customers. That's because larger, chain companies have checks and balances in place that middle- to small-sized businesses sometimes do not.
In Sikeston, however, none of the business representatives interviewed for this article could recall of a single case of identity theft.
Those area businesses have worked to comply with the rule, although most said they have already had those additional checks and balances -- such are requiring photo identification and proof of address -- in place already.
"We've got everything in place that's required," said Shannon Shipman, general manager at Autry Morlan in Sikeston. "We've had the program six or eight months."
Shipman said the business itself didn't have to do a lot of extra work. "It all basically went through the credit companies that we use," he said.
At Kingsway Furniture and Appliance in Sikeston, some extra measures have been taken recently.
"We have started asking for a photo identification -- typically a driver's license -- are now required when someone applies for credit," said Greg Bailey, general manager. "But we've been doing that for some time now."
Sun Loan's new policies have also been in place for awhile. There, credit applications may be done on the phone, but to actually get a loan, the applicant must visit the office in person and have photo identification, in addition to verification of their address, such as a paycheck stub, said manager Lori Bryan.
"And we always ask customers for their address and phone number as soon as they come in, even if it is just for a payment," said Bryan. When the office began the extra measures, there were a few questions, she said, but now consumers understand the reason.
"They appreciate it," she said. Signs are also posted there, explaining verification is needed for the safety of both the consumer and the business.
Bailey agreed that while there may be a few more requirements, it's well worth it.
"I think it's a good step to take," he said. "It's really not all that burdensome for us or the consumer, so we are willing to do anything we can to protect anyone's identity, as long as it's not unreasonable and burdensome."
Rousseau said it's a balance between convenience and security.
"It's kind of hard to get them to both work simultaneously," he said. "But it's going to be a good thing, because it take hundred of hours to rectify identity theft. If it can be prevented from occurring in the first place, I think it's worth giving up a few more minutes or a little bit more documentation."
The ruling was initially set with a Nov. 1 deadline. However, just recently, that deadline was extended to May 1.
"Up until recently, (some businesses) didn't think they would be affected, but they are," said Rousseau.
The FTC has defined a creditor to be "any entity that regularly extends, renews or continues credit; any entity that regularly arranges for the extension, renewal or continuation of credit; or any assignee of an original credit." Some examples provided by the FTC are finance companies, auto dealers, mortgage brokers, utility companies, telecommunications companies and non-profit and government entities that defer payment for goods and services.
The FTC launched outreach efforts in 2007 to explain the rule, what it requires and an explanation of those entities covered. For businesses that want to read more and see if they fall under the ruling, a general alert can be found online at http://www.ftc.gov/bcp/edu/pubs/business....