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The US government has issued a new regulation to implement the Fair and Accurate Credit Transactions or FACT Act. This regulation, called Identity Theft Red Flags Rule, is already in effect with compliance mandatory on November 1st 2008.
CompliancePal is an innovative software solution developed by Compliance Coach that makes it easy, quick and inexpensive to comply with the ID Theft Red Flags Rule.
Automotive Industries (AI) spoke to Sai Huda (SH), Compliance Coach chairman and CEO.
AI: How have companies that offer credit reacted to the new Identity Theft Red Flags Rule?
SH: The first type are companies that realize complying with the Rule will not be easy and will take a lot of work. They still need further guidance and a tool to help them comply correctly. The second type are companies that are now just getting up to speed with the Rule and starting compliance efforts. They need a tool to make compliance easier, faster and correct. The third type are companies think they will have plenty of time to get into compliance – this is the majority. These are the ones that will most definitely need a tool in order to make the deadline, because they have underestimated the time and effort it will take to comply.
AI: How will the new Regulation affect automotive companies’ client credit applications?
SH: Automotive companies are one of the largest sectors that are directly affected by the new Rule. They will have to expend a significant amount of time and money to get into and stay in compliance. The new Rule raises the bar for automotive companies. These companies are now expected to take active steps to detect, prevent and mitigate identity theft during the credit process. The regulation spells out that an automotive company must implement an effective identity theft prevention program. Certain new procedures must be implemented and followed.
Additionally, automotive companies must ensure they are in full compliance with the new Rule in order to be able to obtain financing from financial institutions or other investors. Compliance will be enforced by the marketplace, along with the FTC and other federal and state regulators.
AI: How have you helped these auto firms? Can you please give us some examples?
SH: Non-compliance penalties are severe. The biggest penalty is negative publicity and harm to a company’s reputation and goodwill.
Compliance Coach developed CompliancePal to make it easy, fast and inexpensive to comply with the Rule. The website is www.compliancepal.com. An automotive company can use it to do the risk assessment, map the red flags to appropriate detection and response procedures, and produce the necessary program and training for its employees with a few clicks of the mouse and save hundreds of hours and thousands of dollars.
AI: Tell us about when you started working on updating CompliancePal to take into account the new legislation and how the process evolved.
SH: Compliance Coach is always monitoring new legislation and regulations and determining whether a tool or solution is necessary to facilitate compliance. As soon as the new Identity Theft Red Flags Rule was issued, within five days Compliance Coach developed a training program for our customers to educate them on the Rule and its impact, and started to develop a software solution and be the first to market. We put together a team of subject matter and technology experts, and within a few months developed and launched the CompliancePal software.
AI: How has industry reacted to the updated CompliancePal?
SH: Hundreds of companies have already signed up and are using the tool to get into compliance – we have been receiving rave reviews. Our goal is to have as many as possible out of the millions that need to comply. The tool is easy to use and makes it simple to comply using a proprietary 5 step system. It is all web-based and there is no software to install. It is also most affordable. Daniel Kehrer, Executive Editor at Business.com, said CompliancePal is “among seven of the best and brightest 2008 web-based products.”
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