CAI’s Legislative Heads Up web page has more information, but in short, “Red Flag” rules require that certain entities that extend credit or payment plans to consumers adopt policies to flag consumer identity theft. The big question, of course, is do these rules apply to community associations? As is the case with most complex government regulatory schemes the answer is a clear and unequivocal “MAYBE”.
Generally the attorneys we consulted believe that these rules probably don’t apply to most community associations, but they were concerned that the broad nature of the regulatory language may mean that the regulations could apply under certain circumstances. Because each association is different, and their assessment policies, special assessments etc, may be handled differently, it is impossible for us to say one way or the other if the rule applies to any specific association or circumstance.
Which means each association needs to examine their policies and procedures regarding payments from owners in consultation with their association attorney. To help get that conversation started, we have put together a explanatory memo, with a sample policy, that is designed for an association to use in conjunction with advice from their attorney to understand the rule and make a final determination as to implementing a policy in their community. Here is the Summary of the FTC Red Flag Rule http://bit.ly/3DVnQH
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