Archives: Red Flags Rules

The FTC has again extended enforcement of the Red Flag Rules, this time until June 1, 2010.

This extension comes just one day after the ABA won a victory with its request that practicing attorneys be exempted from compliance with the Red Flag Rules.

The extension of the enforcement deadline also comes shortly after certain other exemptions, namely, health care practices, accounting practices, legal practices (each with 20 or fewer employees) and certain other businesses approved by the FTC that are engaged in domestic services, engage in services where identity theft is rare and have no incidence of identity theft, were passed in the House of Representatives.

Originally, the Red Flag Rules would have taken effect on November 1, 2008, which was then extended to May 1, 2009, and then further extended to November 1, 2009.

UPDATE: Whether it is because of the economy, or a fear that the Red Flags Rules affects far more retailers than may be understood, the FTC has granted a further delay of enforcement of the Red Flags Rules until August 1, 2009.  Additionally, the FTC will issue a template for lower risk covered entities.  The most recent update can be read here.

This time, nobody can accuse the Federal Trade Commission (“FTC”) and other agencies of implementing new requirements that sneak up on us. These particular regulations (the “Red Flags Rules”), which require that financial institutions and creditors develop and implement written identity theft prevention programs, were issued by the FTC, the federal bank regulatory agencies and the National Credit Union Administration ("NCUA"), as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003 go into effect on August 1, 2009. Originally, the Red Flag Rules would have taken effect on November 1, 2008, which was then extended to May 1, 2009.

The Red Flags Rules require that a program be put in place by financial institutions and creditors that provides for the identification, detection, and response to patterns, practices, or specific activities – known as “red flags.” The purpose of the Red Flags Rules is to help avoid identity theft.


Continue Reading Red Flags Rules Further Delayed, Now Go Into Effect August 1, 2009