ST. CLAIRSVILLE, Ohio - November 16, 2010 - If you're in the market for a car, be prepared to prove you are not a terrorist.

The federal government's Red Flags Rule mandates that auto dealers, banks, credit unions and other "creditors" and "financial institutions" take additional steps to prevent identity theft and fraud, beginning January 1, 2011.

Included in the list of so-called creditors is your family doctor.

Those additional steps include determining whether a person applying for financing - or even paying cash for a car - appears on any government watch lists of known or suspected terrorists or terrorist organizations.

As a result, consumers hoping to finance a new or used car, a home or even a major appliance will be required to supply personal information - such as their Social Security numbers and birth dates, as well as the answers to five questions designed to confirm a customer is who he says he is - to the business at the time of the sale. Those questions could include anything from previous addresses and area codes to the names of other members of the consumer's household.

Thomas Garage Chrysler/Dodge/Jeep in St. Clairsville, Ohio uses a software called Wise Scan ID to simplify the search of public records and the 475-page Office of Foreign Assets Control "Specially Designated Nationals and Blocked Persons" list, commonly referred to as the terror watch list.

Sparing the dealership the time it takes to check the list manually, the software generates a report verifying the person in question is still living and has provided accurate personal information - and that he or she is not listed among suspected terrorists.

Ray Smith, finance manager for Thomas Garage Chrysler/Dodge/Jeep said the Thomas dealership has been using the system for about two years, as the Red Flags Rule was introduced in September 2008. The Federal Trade Commission, however, has delayed enforcement of the rule several times , most recently at the request of some members of Congress who hope to resolve any questions regarding which entities must comply. Currently, enforcement is slated to begin January 1.

After January 1, he said, fines and jail time could result for anyone who commits the federal offense of approving such a sale without performing the required checks on the applicant. (Actually, this could only apply to anyone subject to U.S. federal jurisdiction - Ed.).

As for car dealers, there can be consequences if an automobile is sold to a person on the Office of Foreign Assets Control's list of suspected terrorists, regardless of the price of the vehicle or whether they seek financing.

"We still run the OFAC check if they pay cash," Smith noted.

Todd Thoburn, Internet manager for Thomas Garage, said customers generally do not object to the process.

"Everyone I've had in here has liked it," he said. "Most are receptive, knowing it's protecting their identity. The No. 1 reason is to protect the consumer."