Red Flags Rule Delayed Again!

The Red Flags Rule has been delayed again.

At the request of Members of Congress, the FTC has delayed enforcement of the “Red Flags” Rule until June 1, 2010 for financial institutions and creditors.

The Red Flags Rule requires “creditors” and “financial institutions” with "covered accounts" to address the risks of identity theft by developing and implementing written prevention programs. Businesses must then respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft.

Enforcement of the Rule has already been delayed a number of times, and the latest delay demonstrates the government is having second thoughts. Despite the good intentions, the Red Flags Rule creates a significant burden for businesses. Even with all of the easy to use tutorials provided by the FTC, businesses will have to devote substantial time, and perhaps attorneys fees, to the preparation and implementation of an appropriate plan. Then, after the plan is developed, the workforce will have to be trained and re-trained over time. In this economic climate, this kind of burden may be too much to ask.

See the FTC's statement for yourself: http://www.ftc.gov/opa/2009/10/redflags.shtm