To learn more about the ramifications of the Red Flags Rule, you will create a r

Question

To learn more about the ramifications of the Red Flags Rule, you will create a recommendation for an identity theft prevention program for 123 Bank. The program must detect, prevent, and mitigate identify theft in covered accounts, and must include both new and existing accounts. 123 is a banking institution in a small town. It has two branch offices in neighboring towns. The plan should also take into account the size of company. Identify the warning signs that indicate accounts may have been compromised. Discuss which warning signs or red flags are of greater importance to 123’s given their size and location. Provide rationale behind your ranking. For each risk area identified, provide a proposal for how the risk can be mitigated. Draft a brief summary of your findings.

Explanation / Answer

The warning signs that some accounts may have been compromised are sometimes obvious, for example the account suddenly empties, but they can also be more subtle. Spending patterns, location of purchases, and time of day of the purchase. A way that 123 Bank can protect itself from any of these things would be to set up a firewall that will alert the bank if anything abnormal happens in any of the account. 123 Banks important red flags would be if somebody's account started to fluctuate in ways that it has never done before. If that happens 123 Banks should call the client who owns the account and ask if they were making all of the purchases that were being charged to the account. (this all depends on what time of year it is though. Because, during the Christmas holidays people tend to spend more money than they do during the Fourth of July.) To hinder people from being able to gather their clients they should protect their servers with multiple firewalls which stop all data coming in, and going out without the proper authorization. The authorization should be protected by the bank owner and only distributed by him.

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