Identity-Fraud Expert Offers Insight into OTS Red Flag Examination Procedures
NORTHFIELD, MINN. (August 14, 2008) — Now that the Office of Thrift Supervision (OTS) has unveiled its FACT Act Red Flags examination procedures, financial institutions are getting the first concrete look at what they can expect during an examination. With less than three months to go before the November 1 compliance deadline, many banks are realizing that they need to expedite implementation of the necessary policies and procedures.
Identity-fraud risk-management company ID Insight has been following and reporting on the FACT Act Red Flags process since 2003. According to company president Adam Elliott, the OTS procedures will no doubt act as a wake-up call for financial institutions who may have been hoping for a little more leniency in their compliance timeline.
“Many of the institutions we’ve been talking with have been counting on some flexibility in the degree to which they comply with the deadline,” says Elliott. “Based on the OTS examination procedures, November 1 means November 1.” The urgency may be further accelerated by the stated OTS audit requirements that Board of Director meeting minutes prior to November 1 must indicate Board of Director approval of the financial institution’s FACT Act compliance program. This likely means that all system changes, policies, procedures and training programs must also be in place by the deadline.
The new prescriptive Red Flag guidelines require institutions to begin scrutinizing address changes on existing customers, as well as new account applications where the application address differs from the information maintained by the credit bureaus. “The OTS procedures reinforce exactly what we’ve been discussing with institutions since the Red Flag guidelines were announced,” Elliott says. “The announcement makes it clear that they want a consistent and deliberate approach to dealing with address changes, one that can be sampled. The easiest and surest way to get there is to use technology and automation to your advantage.”
In the past several months, many banks and credit unions have implemented ID Insight’s automated Red Flag and address-discrepancy compliance solution, Safe2ChangeSM. “It’s an increasingly positive sign that institutions are getting serious about taking the right steps toward compliance,” Elliott says. “Our turnkey Safe2Change system provides easy auditability, and ensures compliance with FACT Act regulations, while at the same time reducing back-office costs substantially.”
ID Insight has developed several tools to support institutions’ ongoing compliance efforts. IDInsight.com features a White Paper outlining the benefits of choosing an automated solution, as well as a Webinar covering cost-effective compliance, and links to the OTS examination procedures.
About ID Insight
ID Insight, the innovator in Access-Point Intelligence, knows more about people and their access points -- physical addresses, phone numbers and other points where fraud occurs -- than any other identity-fraud risk-assessment company. Based in Northfield, Minn., the company combines its massive collection of data on people and access points with patent-pending analytics to help companies prevent fraud, reduce costs and capture more business. ID Insight provides next-generation verification, authentication, and fraud solutions to financial services companies, credit issuers, retailers, online merchants and wireless providers nationwide. For more information, visit www.idinsight.com.
# # #
Media Contacts:
- Brian Bellmont for ID Insight, (952) 233-0428,
