Red Flag Rules Delayed Again to June 1, 2010
November 09, 2009
by Michael Fleming
The Federal Trade Commission has announced yet another delay in the effective date of the controversial Red Flag rules. The rules are intended to have businesses that grant credit to consumers have written policies to identify possible identity fraud situations and report those issues to authorities.
The controversies are multi-fold. Some involve simple concerns that businesses may have about the additional paperwork and processes—and subsequent added costs—they are potentially facing. Others involve businesses that feel the FTC's widely-inclusive definition of a business that grants credit should be narrowed. For examples, medical providers have been active in fighting the application of the law to their businesses and the legal profession through the American Bar Association has sued the FTC and obtained early relief from a court. Also, Congress is considering a bill that would mandate that certain types of businesses be excluded from enforcement under the Red Flag rules.
The FTC's statement: "At the request of Members of 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."
- Michael Fleming is a member of the Larkin Hoffman Daly & Lindgren Ltd. Intellectual Property, Technology and Internet Practice.