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'Red Flags' enforcement date extended again, now to Aug. 1

November 15, 2010

The Federal Trade Commission on April 30 announced a second delay in enforcement of the new "Red Flags Rule." Creditors and financial institutions now have until Aug. 1, 2009, to develop and implement written identity theft prevention programs.

"Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the Red Flags Rule will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs, and give Congress time to consider the issue further," FTC Chairman Jon Leibowitz said.

The Fair and Accurate Credit Transactions Act of 2003 (FACTA) directed financial regulatory agencies, including the FTC, to develop rules requiring "creditors" and "financial institutions" with covered accounts to implement programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft.

FACTA’s definition of "creditor" applies to any entity that regularly extends or renews credit - or arranges for others to do so - and includes all entities that regularly permit deferred payments for goods or services.

The FTC offers more resources to help covered entities design and implement identity theft prevention programs. Go to the agency’s Web site,