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Red Flags Rule Extension

Thursday, November 5, 2009

On October 30, 2009, the Federal Trade Commission issued a press release delaying the enforcement of the Red Flags Rule until July 1, 2010.  This Rule was established by the Federal Trade Commission under the Fair and Accurate Credit Transactions Act of 2003.  This was the second time that the enforcement of the Red Flags Rule was delayed: the Red Flags Rule was originally set to go into effect on May 1, 2009 but enforcement was delayed until November 1, 2009.

The Red Flags Rule requires creditors and financial institutions that have covered accounts to develop and implement theft prevention programs to help identify, detect, and respond to activities that could indicate identity theft.  The Federal Trade Commission has posted several materials on its website, has published a compliance guide for business, and has created a template that enables low risk entities to create an identity theft program using an online form.  All of this and other information is available online at www.ftc.gov/redflagsrule.

If you have any questions regarding the Red Flags Rule, please contact Jerome J. Reso, Jr. or Lance J. Arnold at 504.569.2900.