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Understanding the Fed

National Mortgage Professional
Jun 29, 2008

Compliance Coach identifies the red flags of fraud with new CompliancePal software MortgagePress.comCompliance Coach, CompliancePal, mortgage fraud, red flags, regulatory compliance solutions Compliance Coach Inc., a provider of automated regulatory compliance solutions to the financial services industry, has announced that it has identified 11 new identity theft red flags and has updated its software, CompliancePal. The Federal regulation imposes new responsibilities on businesses to prevent consumer identity theft. The impact is broad and the rule affects every single bank, credit union, mortgage lender, auto dealer, credit card lender, payday lender, landlord, utility company, phone company, and any consumer or small business lender in the country. The compliance deadline is Nov. 1, 2008. Failure to comply can lead to civil money penalty for each violation, regulatory enforcement action, private plaintiff lawsuits, negative publicity and loss of business. "The Rule applies not only to a consumer purpose account but also any other account with a reasonably foreseeable risk of identity theft. So a business account may also be susceptible to identity theft," said Sai Huda, chairman and CEO, Compliance Coach. "CompliancePal is updated regularly for new red flags so affected companies can perform a detailed risk assessment to include consumer as well as business accounts and all relevant red flags to ensure full compliance." CompliancePal enables a financial institution or creditor to quickly and easily get into and stay in compliance. Under the rule, companies must monitor for new identity theft risks and update their program for new red flags. CompliancePal already contains the 26 identity theft red flags previously published by the government, as well as 23 new red flags identified by Compliance Coach. The red flags are based on recent identity theft cases and schemes affecting financial institutions, creditors and consumers. These 11 new red flags identified by Compliance Coach and added to CompliancePal create a total of 60 red flags that affected companies must consider and indicate business accounts are equally at risk. For example, in both United States v. Perry and United States v. Williams cases, fraudsters used business accounts to commit identity theft that resulted in losses to businesses and financial institutions exceeding $500,000 and $400,000 respectively. In both cases, there were several red flags of identity theft that financial institutions failed to detect and take timely action. "Compliance Coach's team of legal and compliance experts monitor and analyze identity theft cases, schemes and trends daily to identify new red flags. CompliancePal is the only solution for millions of companies to easily stay on top of new red flags," said Huda. CompliancePal is a Web-based software that walks the user through a series of questions and produces: The required risk assessment, the mapping of red flags to appropriate detection and response procedures, the written program, the training materials and the compliance status report, everything necessary to pass an audit. The software is updated regularly for new identity theft schemes and red flags so a company can easily update its identity theft program and maintain compliance. To use the solution, companies simply sign-up online and access the software via the Internet. A demo can be viewed online at at For more information, visit
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