FTC delays Red Flags Rule another 3 months

The U.S. Federal Trade Commission (FTC) is once again delaying enforcement of the Red Flags Rule, this time until November 1, 2009, to give small businesses and other entities more time to come up to speed on how to comply with the new identity theft rules, the agency said in a news alert.

The FTC will provide additional resources and guidance to clarify whether businesses are covered by the rule, and give them more time to review this guidance and develop and implement written identity theft prevention programs.

The FTC's Red Flags Web site offers resources to help entities determine if they are covered and how to comply if they are. It includes an online compliance template that enables companies to design their own Identity Theft Prevention Program. FTC staff will create a special link for small and low-risk entities on the Web site with materials that provide guidance and direction regarding the rule, according to the agency.

Published by the FTC in conjunction with the U.S. Department of the Treasury and other federal financial oversight agencies, the Red Flags Rule requires financial institutions, mortgage brokers, and creditors -- including dentists and other healthcare providers, according to the FTC -- to develop a written plan to detect identity theft in their businesses. Failure to comply could result in administrative penalties and up to $2,500 in fines per violation.

The rule had originally been schedule to take effect last November, but was delayed until May 1, 2009, and then again until August 1.

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