The U.S. Federal Trade Commission posted this statement on their website near the end of the day on Friday, October 30:
the request of Members of Congress, the Federal Trade Commission is
delaying enforcement of the “Red Flags” Rule until June 1, 2010, for
financial institutions and creditors subject to enforcement by the FTC.
Rule was promulgated under the Fair and Accurate Credit Transactions
Act, in which Congress directed the Commission and other agencies to
develop regulations requiring “creditors” and “financial institutions”
to address the risk of identity theft. The resulting Red Flags Rule
requires all such entities that have “covered accounts” to develop and
implement written identity theft prevention programs to help identify,
detect, and respond to patterns, practices, or specific activities –
known as “red flags” – that could indicate identity theft.
Commission previously delayed the enforcement of the Rule for entities
under its jurisdiction until November 1, 2009. The Commission staff has
continued to provide guidance to entities within its jurisdiction, both
through materials posted on the dedicated Red Flags Rule Web site (www.ftc.gov/redflagsrule),
and in speeches and participation in seminars, conferences and other
training events to numerous groups. The Commission also published a
compliance guide for business, and created a template that enables low
risk entities to create an identity theft program with an easy-to-use
online form. FTC staff has published numerous general and
industry-specific articles, released a video explaining the Rule, and
continues to respond to inquiries from the public. To assist further
with compliance, FTC staff has worked with a number of trade
associations that have chosen to develop model policies or specialized
guidance for their members.
On October 30, 2009, the U.S. District
Court for the District of Columbia ruled that the FTC may not apply the
Red Flags Rule to attorneys. Today’s announcement that the Commission
will delay enforcement of the Rule until June 1, 2010, does not affect
the separate timeline of that proceeding and any possible appeals. Nor
does it affect other federal agencies’ ongoing enforcement for financial
institutions and creditors subject to their oversight.
Federal Trade Commission works for consumers to prevent fraudulent,
deceptive, and unfair business practices and to provide information to
help spot, stop, and avoid them. To file a complaint in English or
Spanish, visit the FTC’s online Complaint Assistant
or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into
Consumer Sentinel, a secure, online database available to more than
1,700 civil and criminal law enforcement agencies in the U.S. and
abroad. The FTC’s Web site provides free information on a variety of consumer topics."
NACM has repeatedly covered the FTC's "Red Flags" Rules in both eNews and in Business Credit magazine. Check back on NACM's blog for any future updates.
Jacob Barron, NACM staff writer