In 2003, the Red Flags Rules were mandated as part of the Fair and Accurate Credit Transactions (FACT) Act. This act was implemented in response to a rise in identity theft and identity fraud claims, particularly within the lending industry. With these guidelines, the federal government requires creditors and financial institutions to implement a system of checks so that they may "identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft." Adhering to the Red Flags Rules requires organizations to develop a written procedure to prevent identity fraud. This procedure involves monitoring and responding to Red Flags-a term used to identify warning signs of identity theft and potential identity fraud.