|FTC - Red Flag Rule|
FTC Will Grant Six-Month Delay of Enforcement of 'Red Flags' Rule Requiring Creditors and Financial Institutions to Have Identity Theft Prevention Programs
The Federal Trade Commission will suspend enforcement of the new “Red Flags Rule” until May 1, 2009, to give creditors and financial institutions additional time in which to develop and implement written identity theft prevention programs. Today’s announcement and the release of an Enforcement Policy Statement do not affect other federal agencies’ enforcement of the original November 1, 2008 deadline for institutions subject to their oversight to be in compliance.
The Red Flags Rule was developed pursuant to the Fair and Accurate Credit Transactions (FACT) Act of 2003. Under the Rule, financial institutions and creditors with covered accounts must have identity theft prevention programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft.
The Rule applies to
creditors and financial institutions. Federal law defines a creditor to
be: any entity that regularly extends, renews, or continues credit; any
entity that regularly arranges for the extension, renewal, or
continuation of credit; or any assignee of an original creditor who is
involved in the decision to extend, renew, or continue credit.
Accepting credit cards as a form of payment does not, in and of itself,
make an entity a creditor. Some examples of creditors are finance
companies, automobile dealers, mortgage brokers, utility companies,
telecommunications companies, and non-profit and government entities
that defer payment for goods or services. Financial institutions
include entities that offer accounts that enable consumers to write
checks or to make payments to third parties through other means, such
as other negotiable instruments or telephone transfers.
The 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 1,500 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.
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