“Red Flags Rule” Enforcement Delayed

By: Gardiner Thomsen CPAsemail

Businesses now have until August 1st, 2009 to comply with the Federal Trade Commission’s (FTC) “Red Flags Rule.” The Fair and Accurate Credit Transactions Act of 2003 directed financial regulatory agencies, including the FTC, to create rules requiring “creditors” and “financial institutions” with covered accounts to implement identity theft prevention programs. These rules became known as the “Red Flags Rule.” Due to the uncertainty of some entities as to whether or not they were covered by the compliance requirement, the FTC extended the compliance date. This extension should allow those entities who are required to comply ample time to develop and implement identity theft prevention programs. In addition, the FTC has developed a compliance guide to help businesses understand if they are covered by this requirement and help these businesses develop appropriate identity theft prevention programs. The guide can be accessed at www.ftc.gov/redflagsrule. While the FTC has delayed enforcement of this rule, identity theft remains a major concern throughout the United States. According to the FTC resource web site, in 2008, Iowa ranked only at 48th in the nation for Identity Theft complaints as a percentage of population. Compared to Arizona in 2008, at 149 complaints per 100,000 people (1st), Iowa only had 44.9. Minnesota came in at 67.6 (35th), South Dakota at 33.8 (50th), Nebraska at 59.2 (37th), Kansas at 71.6 (34th), Missouri at 75.0 (27th), Illinois at 106.4 (8th), and Wisconsin at 56.0 (41st). If you have any concerns or questions about identity theft, you can visit www.ftc.gov or call us and we’ll help you sort it all out.