The Fair and Accurate Credit Transactions Act of 2003 (the "FACT Act") mandated numerous changes to various rules and regulations relating to how businesses handle credit-based transactions. Among the changes is a mandate that certain businesses (creditors and financial institutions) implement rules that would "red flag" them to the possibility of identity theft by a customer or potential customer.

 

Creditors are defined as entities that regularly extend or renew credit, arrange for others to do so, or participate in credit decisions without actually making the decisions.  Further, the definition includes entities that regularly permit deferred payments for goods and services.

 

Under this very broad definition, real estate brokers would likely be covered by these new requirements if they:

 A covered entity is required to develop policies to assist in identifying cases of potential identity theft. Depending on the entity and the overall likelihood of identity theft, the policy could be very basic to very complex.

 

The resources below link to NAR's Identity Theft home page with updates on several related topics, as well as the FTC Red Flag Rules page.  The FTC page contains good FAQs and other basic information on the rules, as well as a template for creating a basic policy for low risk entities.