FTC Extends Enforcement Deadline for Red Flags Rule to June 2010

Due to a request from Congress, the Federal Trade Commission is delaying enforcement of the Red Flags Rule until June 1, 2010, for financial institutions and creditors subject to enforcement by the FTC, according to an FTC news release.

The Red Flags Rule requires all entities defined as "creditors" or "financial institutions" that have "covered accounts" to develop and implement written identity theft prevention programs to help identify, detect and respond to patterns, practices, or specific activities — known as "red flags" — that could indicate identity theft, according to the release.

On Oct. 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, and as a result, enforcement will be delayed until June 1, 2010. According to the release, this does not affect the separate timeline of that proceeding and any possible appeals, nor does it affect other federal agencies' ongoing enforcement for financial institutions and creditors subject to their oversight, according to the release.

FTC previously delayed the enforcement of the Red Flags Rule for entities under its jurisdiction until Nov. 1, 2009, and has provided guidance to entities through materials posted on the dedicated Red Flags Rule Web site and through speeches, seminars and numbers published documents. A video explaining the Rule is also available.

Read the release about the delayed Red Flags Rule enforcement.