University of Illinois Red Flags Rule Best Practices
for Units that Administer Accounts
Use the guidelines below in conjunction with the main Red Flags Rule Identity-Theft Prevention Program Best Practices, which apply to all units.
What Types of Accounts Are Covered by the Red Flags Rule?
- Billing, declining balance, debit, and other similar accounts—for example, meal plans, Campus Cash, Dragon Dollars, scholarships or other aid, and funds distributed through declining balance
- Campus-based student loans
- Other loans, such as short-term loans to students, faculty, or staff
What Account-Related Activities Are Covered?
- Administering accounts (includes opening, maintaining, billing, closing, and so on)
- Using consumer credit reports, such as those issued by Experian, TransUnion, and Equifax
- Reporting information to credit reporting agencies
- Selling or transferring debts to a third party
What Are My Unit’s Responsibilities?
Monitor Account Activity
- Have systematic procedures in place to monitor for suspicious account activity.
Verify Addresses When Using Consumer Credit Reports
If your unit uses consumer credit reports (such as those issued by Equifax, TransUnion, and Experian), you must confirm that the addresses you provide to the reporting agency are accurate. If a credit agency notifies your unit of an address discrepancy, you must confirm that the address you provided is accurate. You may do this by:
- Checking with the person about whom you requested the report, provided that you have verified the person’s identity
- Checking third-party sources, such as phone books or address listings on the web but not relying on any single such source as authoritative
The verified address must be reported back to the consumer credit reporting agency during the same reporting period that the agency establishes a relationship with the individual.
Ensure that Third-Party Service Providers Are Following the Red Flags Rule
If any non-University third parties handle account or debt-collection functions on your behalf,
- Inform providers of the University’s Red Flags program and policy. A program description is available.
- Require and maintain a Red Flags compliance statement from each provider
- Require providers to report confirmed incidents to you immediately that involve your accounts or the personally identifying information associated with them
Know How to Respond When Red Flags Are Detected
Have procedures in place to identify and respond to suspected cases of identity theft. Within your unit, ensure that staff members know whom to contact if they suspect identity theft. At a minimum, procedures must address the examples of red flags specified in the “FTC Red Flags Examples—Accounts” table below. Address examples to the extent that they apply to your unit’s activities. Units must also address any other red flags that are relevant to their activities.
Appropriate responses will vary, depending on your unit’s operations. Responses should include (as relevant to unit activities):
- Monitoring the account for evidence of identity theft
- Contacting the account holder
- Changing any passwords, security codes, or other security devices that permit access to the account
- Reopening a covered account with a new account number
- Not opening a new account
- Closing an existing account
- Not attempting to collect on the account or not selling the account to a debt collector
- Notifying campus police
- Determining that no response is warranted under the particular circumstances
Be Able to Recognize Red Flags
Define which patterns, practices, or specific activities indicate the possible presence of identity theft; that is, identify red flags that alert your unit to potential cases. The Rule includes a list of 26 examples of red flags. The following table shows the examples that apply to opening and administering accounts. Your unit should also monitor for other red flags that you have identified as relevant to your operations. Be sure to report these additional red flags to the Red Flags Steering Committee using the Red Flags Unit Registration and Update form .
FTC Red Flags Examples—Accounts
- Documents provided for identification appear to have been altered or forged.
- The photograph or physical description on the identification is not consistent with the appearance of the applicant or customer presenting the identification.
- Other information on the identification is not consistent with information provided by the person opening a new covered account or customer presenting the identification.
- Other information on the identification is not consistent with readily accessible information that is on file with [the University/unit], such as a signature card or a recent check.
- An application appears to have been altered or forged, or gives the appearance of having been destroyed and reassembled.
Suspicious personal[ly] identifying information
- Personal[ly] identifying information provided is inconsistent when compared against external information sources used by [the University/unit]. For example:
- The address does not match any address in the consumer report; or
- The Social Security Number (SSN) has not been issued, or is listed on the Social Security Administration’s Death Master File.
- Personal[ly] identifying information provided by the customer is not consistent with other personal[ly] identifying information provided by the customer. For example, there is a lack of correlation between the SSN range and date of birth.
- Personal[ly] identifying information provided is associated with known fraudulent activity as indicated by internal or third-party sources used by the [University/unit]. For example:
- The address on an application is the same as the address provided on a fraudulent application; or
- The phone number on an application is the same as the number provided on a fraudulent application.
- Personal[ly] identifying information provided is of a type commonly associated with fraudulent activity as indicated by internal or third-party sources used by [the University/unit]. For example:
- The address on an application is fictitious, a mail drop, or prison; or
- The phone number is invalid, or is associated with a pager or answering service.
- The SSN provided is the same as that submitted by other persons opening an account or other customers.
- The address or telephone number provided is the same as or similar to the account number [sic] or telephone number submitted by an unusually large number of other persons opening accounts or other customers.
- The person opening the covered account or the customer fails to provide all required personal[ly] identifying information on an application or in response to notification that the application is incomplete.
- Personal[ly] identifying information provided is not consistent with personal[ly] identifying information that is on file with [the University/unit].
- For [units] that use challenge questions, the person opening the covered account or the customer cannot provide authenticating information beyond that which generally would be available from a wallet or consumer report.
Unusual use of, or suspicious activity related to a covered account
- Shortly following the notice of a change of address for a covered account, [the University/unit] receives a request for a new, additional, or replacement card or a cell phone, or for the addition of authorized users on the account.
- A new revolving credit account is used in a manner commonly associated with known patterns of fraud. For example:
- The majority of available credit is used for cash advances or merchandise that is easily convertible to cash (e.g., electronics equipment or jewelry); or
- The customer fails to make the first payment or makes an initial payment but no subsequent payments.
- A covered account is used in a manner that is not consistent with established patterns of activity on the account. There is, for example:
- Nonpayment when there is no history of late or missed payments;
- A material increase in the use of available credit;
- A material change in purchasing or spending patterns;
- A material change in electronic fund transfer patterns in connection with a deposit account; or
- A material change in the phone call patterns in connection with a cellular phone account.
- A covered account that has been inactive for a reasonably lengthy period of time is used (taking into consideration the type of account, the expected pattern of usage and other relevant factors).
- Mail sent to the customer is returned repeatedly as undeliverable although transactions continue to be conducted in connection with the customer’s covered account.
- [The University/unit] is notified that the customer is not receiving paper account statements.
- [The University/unit] is notified of unauthorized charges or transactions in connection with a customer’s covered account.
Notice from customers, victims of identity theft, law enforcement authorities, or other persons regarding possible identity theft in connection with covered accounts held by [the University/unit]
- [The University/unit] is notified by a customer, a victim of identity theft, a law enforcement authority, or any other person that [the University/unit] has opened a fraudulent account for a person engaged in identity theft.
Alerts, notifications or warnings from a Consumer Reporting Agency
- A fraud or active duty alert is included with a consumer report.
- A consumer reporting agency provides a notice of credit freeze in response to a request for a consumer report.
- A consumer reporting agency provides a notice of address discrepancy.
- A consumer report indicates a pattern of activity that is inconsistent with the history and usual pattern of activity of an applicant or customer, such as:
- A recent and significant increase in the volume of inquiries;
- An unusual number of recently established credit relationships;
- A material change in the use of credit, especially with respect to recently established credit relationships; or
- An account that was closed for cause or identified for abuse of account privileges by a financial institution or creditor.
Who To Ask
Direct any questions to the Red Flags Steering Committee at firstname.lastname@example.org.
Last Updated: June 3, 2011