CHICAGO—In a message sent to its members, the North American Association of Floor Covering Distributors (NAFCD) noted that all businesses that extend credit to customers are required to be in full compliance with the Federal Trade Commission’s (FTC) Fair & Accurate Credit Transactions Act by the beginning of this month.

The act requires companies must have an ID theft prevention program that includes policies and procedures to identify relevant “red flags.” A red flag is a pattern, practice or specific activity that indicates the possible existence of ID theft. Covered accounts include anyone who arranges for the extension, renewal or continuation of credit. Examples include credit card accounts, cell phone accounts and any other account where there is a reasonably foreseeable risk to a customer or financial institution from identity theft.

According to the FTC, a reasonable plan to safeguard personal information includes:

• Designating someone to coordinate and be responsible for the security program;

• Identifying material internal and external risks to security;

• Designating and implementing safeguards to control the risks identified in the risk assessment;

• Continually evaluating and adjusting the security plan as a result of monitoring and testing, material changes to business arrangements or the company’s operations, or any other circumstances that could have a material impact on the effectiveness of the security plan, and

• Create a mitigation plan to kick in when there is a breach.

For more on the act, visit ftc.gov/opa/2007/10/redflag.shtm or call 877.382.4357.