In the process of implementing the Red Flags policy, I had the opportunity to examine past incidents of identity theft.  In doing so, I realized that many cases of identity theft are “inside jobs.”  This drives home the importance of doing good background screenings of all employees.  In fact, I would submit that careful hiring of employees is the most important thing that a dealership can do to prevent identity theft and theft of confidential customer information.  Employees are in the best position to steal – and a thorough background check is the best way to weed out the thieves.

Good employees are also important for another reason – they will follow your rules.  You can have the best information security and red flags policies in the world, but they are useless if no one pays attention to them.  A few simple rules consistently followed will do more than a complicated policy that is ignored.  Good employees are the key to protecting your customers.

So as you are designing and implementing your Red Flags policy, think about the employment angle.  How good is your background screening?  How good is your training?  A good policy might protect your from the FTC, but your employees will protect you from identity thieves.