- Red Flags Rule Enforcement Delayed until June 1, 2010
- January 4, 2010 | Author: Jeffrey J. Storch
- Law Firm: Boardman Law Firm LLP - Madison Office
At Congress' request, the Federal Trade Commission ("FTC") has again delayed enforcement of the Red Flags Rule until June 1, 2010.
The Identity Theft Red Flags Rule (the "Rule") was created under the Fair and Accurate Credit Transactions Act ("FACT"). The Rule requires that creditors and financial institutions address the risk of identity theft. For example, it requires these entities to develop and implement written identity theft prevention programs to assist in detecting and responding to specific acts, recognized as 'red flags', that could in turn, indicate identity theft.
Originally, the Rule was effective on January 1, 2008, and required that programs be in place by November, 2008. However, enforcement was delayed until November 2009. The FTC is again delaying enforcement of the Rule until June 1, 2010. Additional information is available on the FTC's website at www.ftc.gov/redflagsrule.
Further, 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. However, the FTC's delayed enforcement of the Rule does not prevent any possible appeals of that proceeding, nor does it affect other federal agencies' continued enforcement over financial institutions and creditors subject to those other agencies.