6/1/2010 FTC Delays Red Flags Rule Again and Again and Again
June 1, 2010
The FTC’s “Red Flag” mandate to curb identity theft was set to take effect today, June 1, 2010, a year and a half after the original policy was to be enforced. Creditors and Financial Institutions were to develop and implement a written Identity Theft Prevention Program. This time at the 12th hour, it was announced that they will again delay enforcement until December 31, 2010.
According to the FTC, “Congress needs to fix the unintended consequences of the legislation establishing the Red Flags Rule – and to fix this problem quickly. We appreciate the efforts of Congressmen Barney Frank and John Adler for getting a clarifying measure passed in the House, and hope action in the Senate will be swift,” FTC Chairman Jon Leibowitz said. “As an agency we’re charged with enforcing the law, and endless extensions delay enforcement.”
According to the FTC, “The 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.”
Further, all employers that conduct background checks are supposed to have a policy in place to handle “Red Flag” Address Discrepancy Notifications from the National Consumer Reporting Agencies (mainly credit bureaus). This rule has been in effect since November, 2009 and we are still unclear what such notifications will look like when and if they occur.
For more information on these guidelines and how to comply check out: