Deadline Extended for Enforcement of Red Flags Rule
November 05, 2009
At the request of members of Congress, the Federal Trade Commission (FTC) is delaying enforcement of the Red Flags Rule until June 1, 2010 for financial institutions and creditors subject to enforcement by the FTC. The FTC had previously delayed enforcement of the rule until November 1, 2009.
The rule requires financial institutions and "creditors" to address the risk of identity theft. The Red Flags Rule requires these entities to develop and implement written identity theft prevention programs to help identify, detect, and respond to patterns, practices, or specific activities – know as "red flags" — that could indicate identity theft. A "creditor" is defined as any person or business that regularly extends, renews, or continues credit; or any person or business that regularly arranges for the extension, renewal, or continuation of credit. A "covered account" is an account that a financial institution or creditor offers or maintains, primarily for personal, family, or household purposes that involves multiple payments, such as a credit card account, mortgage loan, automobile loan, cell phone account, utility account, etc.
In addition to financial institutions, businesses such as healthcare facilities, nursing homes, and automobile dealers are subject to the Red Flags Rule.
SESCO is available to assist you in developing your policies, procedures, and training programs to comply with the Red Flags Rule. You may contact us at www.sescomgt.com or by phone at 423-764-4127.