The Implanted Bandit – Why The "Red Flags" Rule Matters

A recent incident in Orange County, CA highlights why the FTC’s ”Red Flags” rule instituted in August of 2009 is so important. Last month, a young woman was sentenced to 180 days in jail and 3 years probation for ID theft. She opened a $12,000 credit line in another woman’s name and used it to pay for replacement breast implants and liposuction.

The staff at the Pacific Center for Plastic Surgery became suspicious after Ms. Pampellonne failed to show for her follow up appointments. Detectives ended up tracking her down using the serial number on her old implants. It is unclear how the outstanding debt will be resolved. Will the loan company seek restitution from the surgeon?

If the credit application was filled out at the doctor’s office, that is a possibility. For example, what if staff members failed to check Pampellonne’s drivers license or other photo ID against the information on the loan application before sending it in for processing? An argument might be made that they didn’t take appropriate steps to prevent fraud. Of course, if the thief set up the credit account herself via an online application the surgeon’s office would not be to blame.

Protect Yourself and Your Patients

Every medical office that extends credit or facilitates patient access to credit lines must be diligent in detecting suspicious activity. If you haven’t created written procedures for your ID Theft Prevention Program, get on that right away! Medical ID theft has serious consequences for patients above and beyond a wrecked credit history. Here’s a great educational article from the FTC that outlines some of the red flags healthcare providers should watch out for.

Do you have a ”red flag” story to tell? Let us know how your savvy employees caught an ID thief in the act.

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