FTC chairman outlines ''Red Flag Rule'' to prevent fraud

The Chairman of the Federal Trade Commission recently made headlines when he unveiled new laws that would require businesses which gain credit to have a plan to prevent identity theft and help detect if it is happening. The so-called "Red Flag Rule," outlined in early December by FTC Chairman Jon Leibowitz, will require companies to customize plans based on their industries and incorporate technologies in order to help customers hold keep their identities from those who are looking to commit fraud. Leibowitz said that businesses needed to consider where risks lie. "The rule doesn't require any specific practice or procedures. It gives businesses the flexibility to tailor their written ID theft detection program to the nature of the business and the risks it faces," the chairman said in a statement. "Businesses with a high risk for identity theft may need more robust procedures – like using other information sources to confirm the identity of new customers or incorporating fraud detection software." Other business organizations have been making news by highlighting risks posed by identity theft. In a statement statement, the Better Business Bureau said that businesses needed to watch out for fake check scams and other dishonest practices.