Red Flags Rule

A covered company is a term used to refer to an organization which must comply with the Rule because they have identified covered accounts in their risk assessment process.

A covered account is an account used mostly for personal, family, or household purposes, which involves multiple payments or transactions. Covered accounts include credit card accounts, mortgage loans, automobile loans, margin accounts, cell phone accounts, utility accounts, checking accounts, and savings accounts. A covered account is also an account for which there is a foreseeable risk of identity theft such as small business or sole proprietorship accounts.

A financial institution is typically defined as bank, savings and loan association, credit union, or any other entity that holds a transaction account belonging to a consumer.

A transaction account is a deposit or other account from which the owner makes payments or transfers. Transaction accounts include checking accounts, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.

A creditor is any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit. Accepting credit cards as a form of payment does not make an entity a creditor.