Jeff Storch
Chair, Boardman Taxation Group
Madison
phone: (608) 283-1781
fax: (608) 283-1709
Baraboo
phone: (608) 356-3977
fax: (608) 356-3110
Joshua Hargrove
Contact
phone: (608) 283-7562
fax: (608) 283-1709
Red Flags Rule Enforcement Delayed Until
June 1, 2010
Thanks to Boardman law clerk Joshua Hargrove for his work on this article.
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.
If you have questions about the Red Flags Rule, how it may impact your business, or desire assistance with providing an appropriate identity theft prevention program, contact Jeff Storch or your primary Boardman attorney.
This legal update is not legal advice. Individuals should seek advice based on their particular circumstances from their own counsel.