WEST PALM BEACH, Fla.-The Red Flag regulations are 125-pages long, and identity thieves number in the tens-of-thousands, so credit unions are turning to technology to decipher the rules and deter the thieves.
It seems that few CUs are experts on Red Flag tools and rules-after all, the Fair and Accurate Credit Transactions Act (FACTA) regulations don't go into effect until Saturday. However, Credit Union Journal found three CUs ready to talk about their various identity theft and fraud prevention solutions, which include automated customer identification programs; online behavior analysis; and risk-assessment and policy-development software.
Continental Federal Credit Union
Tempe, Ariz.
$250-million in assets
Red Flag Technology: CompliancePal from San Diego-based Compliance Coach Inc.
Type of Technology: Risk-assessment and policy-development software, plus electronic training modules. "CompliancePal enables the regulatory mandated risk assessment and the generation of a compliant Identity Theft Red Flags Prevention Program, which includes detection and response procedures," said Gini Loop, director of operations, CFCU.
Accounts Addressed: Consumer and business accounts at online and physical branches.
Launched: September. "We signed up for CompliancePal so we could get into compliance before the deadline," Loop said.
Top Features: "There are several extremely valuable features that make compliance precise but quick and easy," she said.
Risk Assessment Worksheets, which help CFCU identify and assess the risk level of covered accounts, according to Loop.
Red Flag Library, taken from the 26 Red Flags in FACTA and from identity theft cases. "This is not a paper tiger," Loop said. "Compliance Coach's staff of attorneys and compliance experts analyzes schemes and cases daily to identify new red flags, update the database regularly and alert the user. Plus, we can add red flags from our own historical experience with the click of a mouse."
Built-in compliance resources, such as an e-learning course on the Red Flag Rules, a best practices webinar, an FAQs bank and daily news of identity theft incidents, that "jump-start" compliance, she said.
Suggested Improvements: "None," said Loop. "Without CompliancePal, it would have been a significant time and resource challenge to meet this deadline."
ROA: Too soon to tell. "Once we have implemented the program and some time has elapsed, we can see the effects," Loop explained.
Star One Credit Union
Sunnyvale, Calif.
$4-billion in assets
Red Flag Technology: FraudMAP from Los Altos, Calif.-based Guardian Analytics
Type of Technology: online fraud detection and alerting solution. Detects behaviors inconsistent with an account holder's regular patterns, a feature that corresponds to several of the Red Flag rules, said Margarete Mucker, VP-remote services, Star One.
Accounts Addressed: Consumer and business accounts online. But Star One also uses FraudMAP to "help offline channels protect accounts from multi-channel fraud, including due diligence on wire transfer approvals and correlation with suspicious center activity," said Mucker.
Launched: 2007. "As Red Flag evolved, it was clear that FraudMAP gave us a big leg up on meeting the requirements," said Mucker.
Top Features: Low false-alert rates and quick investigations of fraud threats.
"FraudMAP helps us across the board," Mucker said. "It helps monitor accounts and quantify identity theft in the online channel so we can account for the effectiveness of our program."
Suggested Improvements: "We use FraudMAP to correlate online activity with other member activity and would like to see FraudMAP incorporate more of this offline activity to span all our member interaction channels," she said.
ROA: Too soon to tell.
Carolina Collegiate FCU
Columbia, SC, $58-million in assets
Red Flag Technology: Red Flag Tools Kit from Minneapolis, Minn.-based Wolters Kluwer Financial Services
Type of Technology: Risk-assessment and policy-development software, plus electronic training modules. "Everything you need, from an initial overview of the regulatory requirements, to staff training and forms," said Anne Shivers, president, Carolina Collegiate.
Accounts Addressed: Consumer and business accounts online and at branches
Launched: September.
Top Features: Sample policies and risk assessments. "The detail within the policies and audit procedures software gave me a better understanding" of the connections Red Flag has to other regulations," Shivers said.
Employee training on Red Flag rules via videos and a self-directed learning module.
Suggested Improvements: An overarching policy template that automatically pulls together all existing Red-Flag related policies.
ROA: Too soon to tell, but "forcing us to think in a coordinated way about protecting our member's identity has been good," said Shivers. "We had good procedures for most of the suggested red flags, but we didn't document in a central place how to address each of these situations. Now we are consistent with documentation and reporting."
MORE@CUJOURNAL.COM
Read more about Red Flag tech at cujournal.com and search the following bolded terms: 'Red Flag' Still at Half Mast
Is Your CU Ready To Raise The Red Flag? Alliant CU Lays Out Its Compliance Plan
Log-In Alerts Block $500,000 In Fraud For info on this story:
www.carolina.org; www.continentalfcu.org
www.starone.org; www.compliancepal.com; www.guardiananalytics.com; www.wolterskluwerfs.com
www.michiganfirst.com
www.redflagrules.net
