On Thursday, April 30, 2009, the day before federal Red Flags Rules were set to go into effect for a wide range of businesses, the FTC published a notice on its website indicating that it is postponing the deadline (yet again) until August 1, 2009. Importantly, this delay appears to be imposed so that the FTC can provide businesses, many of which are confused about how to comply, a "template" identity theft prevention program. "For entities that have a low risk of identity theft, such as businesses that know their customers personally, the Commission will soon release a template to help them comply with the law." The FTC indicates that it will make the template available through their website.
In delaying enforcement, the FTC continues to maintain that the Red Flags Rules apply broadly to any business that bills its customers (i.e., "all entities that regularly permit deferred payments for goods or services"). In particular, the FTC specifically mentions that the statutory term "creditor" encompasses "businesses that provide services and bill later, including many lawyers, doctors, and other professionals." The notice conceeds that considerable confusion has surrounded the preliminary question of who is covered under the new rules. The FTC directs businesses looking for more information to the FTC’s new microsite on the Red Flags Rules.
FTC Releases “Template” Identity Theft Prevention Program for Red Flags Rules Complaince
On Wednesday, May 13, 2009, the FTC released a "template" identity theft prevention program (.pdf) to guide businesses subject to a "low risk" of identity theft through the process of complying with federal Red Flags Rules. The FTC …