Friday, October 31, 2008
The Federal Trade Commission (FTC) has given financial institutions and creditors an extra six months, until May 1, 2009, to comply with the so-called â€œred flags ruleâ€ which requires them to develop and implement written identity theft prevention programs. Apparently some industries and entities within the FTCâ€™s jurisdiction had expressed confusion and uncertainty about their coverage under the rule. Just to be clear, the FTC said the extension does not affect compliance with the original November 1, 2008 deadline for institutions subject to oversight of other federal agencies. Those of you who read our posting a year ago will already be aware that under the red flags rule, financial institutions and creditors with covered accounts mustÂ implement prevention programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate ID theft. As weâ€™ve said before, financial institutions are prime targets of ID theft, so new rules requiring them to take preventive measures could increase their potential liability. Check out further I.I.I. facts and stats on ID theft.