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BOOK 22 P.,sE 380 Introduction In 2003, Congress passed the Fair and Accurate Credit Transactions Act (FACT Act) to address the increasing problems with identity theft and misuse of personal information of consumers. In November 2007, the final rules (known as the Red Flag Rules) and guidelines were issued to implement the FACT Act with an effective date of January 1, 2008 and with full compliance required by November 1, 2008. In October 2008 the Federal Trade Commission (FTC) suspended mandatory enforcement of the new "Red Flag Rule" until August 1, 2009 to give financial institutions and creditors additional time to develop and implement written identity theft prevention programs. The regulations, known as the identity theft "red flag" rules, require the entities they cover to develop policies and procedures to recognize and respond to circumstances that may indicate identity theft has occurred for both new and existing accounts. The new set of regulations is intended to help prevent:, detect, and respond to possible signals (red flags) to mitigate identity theft. The rules apply to financial institutions and creditors (a term that is defined to include any government agency that "regularly extends, renews, or continues credit") who establish or maintain covered accounts containing customer identifying information as defined by the FACT Act of 2003. These rules apply to local governments when they provide a service for which payment if deferred until a future elate. This policy is being initiated in order for tie County of Lee to comply with three (3) new FACT Act regulations referred to as the Red Flag Rules, section 114 and 315 of the FACT Act. The FTC's portion of the rules is contained in Part 681 of Title 16 of the Code of Federal Regulations. Purpose The purpose of this policy is to identify programs and services (accounts) where information is collected by the County from citizens in a "creditor" relationship, determine whether such information is maintained in "covered accounts" containing customer "identifying information" per federal regulations, and establish procedures for the security of such information if necessary. Definitions Covered Account - An account that a financial institution or creditor offers or maintains, primarily for personal, family or household purposes, that involves or is designed to permit multiple payments or transactions; or any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation or litigation risks. Identity Theft/Red Flag Rules Page 2