Red Flags Rule Compliance Guide Now Available for Purchase

On August 1, 2009, the Federal Trade Commission (“FTC”) will begin enforcing new regulations aimed at detecting, preventing and mitigating identity theft (“Red Flags Rule”). The Red Flags Rule applies to “creditors” (i.e., any entity that provides a good or service for which it receives payment at a later time) if they offer or maintain a “covered account”.*

Examples of creditors include:

• Health care providers such as hospitals, physician practices, health clinics, etc., if they provide medical services to patients and defer payment for such services;

• Automobile dealers;

• Mortgage brokers; and

• Any small business that regularly provides goods or services and bills customers later.

If a creditor offers or maintains “covered accounts” (i.e., accounts maintained primarily for personal, family or household purposes that involve or are designed to permit multiple payments or transactions or for which there is a reasonably foreseeable risk of identity theft), the Red Flags Rule requires the adoption of a written Identity Theft Prevention Program to respond to patterns, practices or specific activities of identity theft.

To help small businesses, health care providers and other “creditor” organizations which determine that they are covered by the Red Flags Rule, Burr & Forman has developed a Red Flags Rule Compliance Guide which contains information about the regulations, as well as policy and form templates which subscribers can modify and implement to address their own Red Flags Rule compliance needs. Available for purchase on CD-ROM at a cost of $499, the Guide contains the following items:

• A memorandum providing an overview of the Red Flags Rule and the basic components of an Identity Theft Prevention Program;

• Policy and form templates which provide a foundation for implementing a written Identity Theft Prevention Program; and

• Web links to FTC regulations and Red Flags Rule resources for additional compliance guidance and information.

To order the Guide, contact Connie D’Anna at telephone number (205) 458-5472 or by E-mail at cdanna@burr.com.

*The Red Flags Rule also applies to “financial institutions” but the Red Flags Rule Compliance Guide is not designed for those businesses.