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CATA to host Red Flags Rule seminar Oct. 3

November 17, 2010

An attorney of the National Automobile Dealers Association will conduct a free seminar at the CATA on Oct. 3 about compliance with the new FTC Red Flags Rule. See the flier in the print edition of this newsletter to register to attend.

Dealerships will be required by Nov. 1 to adopt a formal Identity Theft Prevention Program to recognize signs and warnings of potential identify theft, train employees in detecting Red Flags, and take appropriate action when they detect a Red Flag, including investigating further into the identity of the customer seeking credit, and reporting the incident—if identity theft or attempted identity theft is confirmed.

The presentation will review what dealers must do to comply with the new regulation, such as:

• Conducting a preliminary risk assessment
• Constructing a written Identity Theft Prevention Program
• Knowing the indicators of identity theft (Red Flags) and how to respond to them
• Training requirements
• Obtaining service provider oversight
• Involving a dealership’s board of directors

The Red Flags Rule requires a "senior management" Compliance Director and allows for a mid-level Program Coordinator as well, so dealerships should consider sending both of these individuals to the seminar.

Besides the CATA presentation, the NADA last month distributed to its members a comprehensive publication, "A Dealer Guide to the FTC Red Flags and Address Discrepancy Rules: Protecting Against Identity Theft." It explains the requirements and includes detailed, step-by-step guidance on developing the written program required under the rule.

Copies of the publication can be ordered from the NADA at 703-821-7227 or Copies cost $40 for NADA members, $80 for nonmembers.

The publication also serves as the basis for a virtual seminar to be hosted by the NADA 12-2 p.m. Sept. 23. More than 500 individuals and several dealer association groups logged on to the first presentation, on Aug. 26.

The Webinar fee is $199 per computer connection. Register at or 800-248-6232, Ext. 7061.