CFS Identity Theft & Prevention 2

Question 1

Which federal law requires financial institutions to implement a written Identity Theft Prevention Program under the 'Red Flags Rule'?

Accepted Answer

Fair and Accurate Credit Transactions Act (FACTA)

Answer

FACTA Section 114 directed the FTC and other agencies to create the Red Flags Rule requiring covered entities to implement identity theft prevention programs.

Question 2

A fraudster obtains a victim's Social Security number and date of birth to open new credit accounts. This is best classified as which type of identity theft?

Accepted Answer

New account fraud

Answer

New account fraud involves using stolen personally identifiable information to open entirely new credit or financial accounts in the victim's name.

Question 3

Synthetic identity fraud is most challenging to detect because:

Accepted Answer

There is no single real victim who notices unauthorized charges

Answer

Synthetic identities blend real and fabricated information, so no single real person receives statements or notices unusual activity, making detection particularly difficult.

Question 4

Which of the following is a 'Red Flag' indicator of potential identity theft under the FTC's Red Flags Rule?

Accepted Answer

Address discrepancy between application and credit report

Answer

An address discrepancy between what a customer provides and what appears on their credit report is explicitly listed as a Red Flag category requiring investigation.

Question 5

A consumer discovers their medical records contain treatments they never received. This is an example of:

Accepted Answer

Medical identity theft

Answer

Medical identity theft occurs when someone uses another person's identity to obtain healthcare services, prescriptions, or medical devices, corrupting the victim's medical records.

(CFS) Certified Fraud Specialist Practice Test

(CFS) Certified Fraud Specialist Practice Test

CFS Identity Theft & Prevention 2