Have you been losing sleep, worrying about complying with the new Red Flags Rule? We have good news (and another Client Alert) for you. Moments after we sent our Client Alert last week, the Federal Trade Commission (FTC) issued an eleventh hour stay of enforcement. The deadline for complying with the Red Flags Rule is now August 1, 2009.
In recognition of the ongoing debate over the new rule, the FTC decided to give financial institutions and other creditors additional time to develop and implement written identity theft prevention programs. The FTC also wanted to give Congress more time to consider the scope and impact of the rule. As we discussed in our Client Alert, the Red Flags Rule is intended to combat fraud and identity theft by requiring most businesses, health care providers and other organizations that allow payment over time to implement policies to detect the warning signs (red flags) of identity theft. These policies include a written identity theft prevention protocol. The FTC also announced that it will publish a template for “low-risk” businesses, such as businesses that know their customers personally.
If you have any questions or would like assistance with preparing an identity theft prevention policy, please contact your primary attorney at the firm. If you are not presently represented by us, please contact Susan Maslow, Patricia Collins or Joanne Murray at (215) 230-7500.