FTC Delays "Red Flags Rule" Enforcement Until August 1
The Federal Trade Commission (FTC) is again delaying enforcement of the new “Red Flags Rule” until August 1, 2009. Enforcement was originally scheduled November 1, 2008 and last year the deadline was moved to May 1. FTC’s decision is intended to give creditors and financial institutions more time to develop and implement written identity theft prevention programs.
“Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the Red Flags Rule will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs, and give Congress time to consider the issue further,” FTC Chairman Jon Leibowitz said.
The Fair and Accurate Credit Transactions Act of 2003 (FACTA) directed financial regulatory agencies, including FTC, to promulgate rules requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft. FACTA’s definition of “creditor” applies to any entity that regularly extends or renews credit--or arranges for others to do so--and includes all entities that regularly permit deferred payments for goods or services, such as most health care providers. FTC has indicated that it will soon publish a Red Flag Rule compliance template on its Web site. Contact: Mark Thomas