FTC Extends Enforcement
Deadline for Red Flags Rule
At 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.
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.
The 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 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
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. The 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.
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 1,700 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.
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Red Flags Rule Web Site