Anthony LaFaziaCEO, Atlantic Training · CEO at Atlantic Training | EdTech & Safety Compliance Leader

Monitoring Identity Theft Risks: How to Identify Covered Accounts under the Red Flags Rule

10 Jun 2026 · 1 min

Watch on YouTube

1:24

In this training segment, the presenter explains what constitutes a “covered account” under the Red Flags Rule and why monitoring these accounts is critical for identity‑theft risk management. A covered account is defined as any personal, family, or household account that involves multiple payments or transactions—such as credit cards, mortgages, auto loans, and checking accounts—and also any account that an organization has formally identified as vulnerable to identity theft. The speaker stresses that organizations must treat any flagged account type as covered. Two moments are highlighted as especially risky: the account opening phase, when a new customer’s identity is unverified, and the account maintenance phase, where existing accounts can be hijacked through actions like address changes. The presenter warns that account takeovers are a major current threat, making both new‑file setups and routine updates part of the “red flag zone.”

Chapters

So, where do we look for these thieves? We look at what the government calls "covered accounts." Not every interaction you have is a risk, so let's narrow it down. A covered account specifically means an account for personal, family, or household purposes involving multiple payments or transactions. Think credit card accounts, mortgage loans, car loans, or checking accounts. But it also includes any other account where there is a specific and documented risk related to identity theft that your organization has identified. Essentially, if your organization has flagged a specific type of account as being vulnerable to fraud, you treat it as a covered account. We have to be vigilant at two specific times. First, the opening. This is when a new customer comes in to set up a new relationship. This is the most dangerous time because we don't know them yet. Second, the maintenance. This is for existing accounts. Just because someone's been a customer for 5 years doesn't mean the person on the phone is that customer. Account takeovers are huge right now. So whether you're opening a new file or updating an address on an old one, You're in the red flag zone.