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Armed with those facts, brokers can document required identity-theft policies and procedures. Without excessive counseling, the recommended three-hour process goes something like this:
1. Read the regulation (bit.ly/redflag) until you understand what applies to brokers and what doesn't. (20 minutes)
2. Reread it to ensure you can write cogent policies and procedures. (20 minutes)
3. Focus on understanding the suggested 11 guidelines in Appendix J of the regulation that directly pertain to a broker's work. (30 minutes)
4. Start documenting a policy that says which of these 11 guidelines you will address and why or why not. For nine of the 11, the answer will come from ordering and responding to the fraud alerts available on credit reports. The other two are related to blatant identification forgery. (40 minutes)
5. Document simple procedures for what a loan officer should do if an alert appears on the credit report or if the provided identity clearly is a forgery or fictional. Use Social Security Administration form No. 89 as the escalation product. (30 minutes)
6. Plan and document the remaining compliance steps. These include getting signoff at the highest level and how to complete training and updates. (40 minutes)
7. Share and publish the final result with all in the shop and follow up.
Armed with at least these efforts, you can help prevent many occurrences of identity theft and meet Red Flags Rule requirements.
Brad Kelso is vice president and director of marketing and product development at Informative Research. He has 22 years in financial services. Before joining Informative Research, Kelso led Countrywide's credit-fraud initiatives and system-development efforts with credits as a national expert and speaker on authorized-user-score fraud.
Reach him at (800) 473-4633, ext. 150, or firstname.lastname@example.org. For compliance suggestions, visit Informative Research's complimentary "Red Flags Broker Tool Kit" at www.informativeresearch.com/RedFlags/Broker_Tool_Kit/index.htm.
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