FTC Delays Implementation of Red Flag Rules
This post was authored by FHWN attorney Sue Nolan
Just 4 days before the scheduled June 1 start date, the Federal Trade Commission (FTC) announced that it has again delayed enforcement of the Red Flags Rule until January 1, 2011. The extension was made in order to enable Congress to pass legislation that affects the scope of entities covered by the Red Flags Rule. Such clarifying legislation was introduced in the Senate this past week. If such legislation passes with an effective date sooner than December 31, 2010, the FTC will begin enforcement as of the date specified by Congress.
The pending legislation provides exemptions for those health care practices, legal practices, and accounting practices that have 20 or fewer employees. It also authorizes the FTC to grant an exemption to a business that has a low risk of identity theft. Such a business is one that either personally knows its customers, only provides services at a customers' residences or has not experienced any incidences of identity theft and identity theft is rare businesses of its type.
