by
Astrid Fiano, DOTmed News Writer | July 31, 2009
Delay gives small
businesses time to review
and implement rules
The Federal Trade Commission (FTC) has just announced in a press release on its website that enforcement of the "Red Flag" Rule will be delayed until November 1, 2009. The agency says that this delay will allow "creditors and financial institutions more time to review this guidance and develop and implement written Identity Theft Prevention Programs."
The Red Flags Rule requires creditors and financial institutions to adopt programs that prevent identity theft prevention programs. The FTC has stated that health care professionals are subject to the Rule. (See DM 9497) The Rule was mandated by the Fair and Accurate Credit Transactions Act of 2003 (FACTA). FACTA's definition of "creditor" includes any entity that extends credit on a regulator basis or arranges for others to do so and all entities that regularly permit deferred payments for goods or services.
In its press release, the FTC says its staff will "redouble its efforts to educate" small businesses and other entities concerning compliance with the "Red Flags" Rule, provide additional resources and guidance to clarify who is covered by the Rule and what must be done to comply. The extension, the FTC says, "should enable businesses to gain a better understanding of the Rule and any obligations that they may have under it." The agency says its action is consistent with the House Appropriations Committee's recent request that the FTC defer enforcement as part of efforts to "minimize the burdens of the Rule on health care providers and small businesses with a low risk of identity theft problems."
The FTC's Red Flags Web site, www.ftc.gov/redflagsrule, has resources to assist entities determine if they are covered and if so, how to comply with the Rule. The announcement that the Commission will delay enforcement of the Rule until November 1, 2009, does not affect other federal agencies' enforcement of the original November 1, 2008, compliance deadline for institutions subject to the agencies' oversight.
Adapted from a press release by the FTC.
