The U.S. Federal Trade Commission (FTC) announced that it will delay enforcement of the new Red Flags Rule identity theft legislation until August 1, 2009, to give creditors and financial institutions more time to develop and implement written identity theft prevention programs.
Published by the FTC in conjunction with the U.S. Department of the Treasury and other federal financial oversight agencies, the Red Flags Rules require financial institutions, mortgage brokers, and creditors -- including dentists and other healthcare providers, according to the FTC -- to develop a written plan to detect identity theft in their businesses. Failure to comply could result in administrative penalties and up to $2,500 in fines per violation.
The law had originally been schedule to take affect last November, but was delayed until May 1, 2009.
For entities that have a low risk of identity theft, such as businesses that know their customers personally, the FTC said it is planning to release a template to help them comply with the law.
"Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the Red Flags Rule will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs, and give Congress time to consider the issue further," FTC Chairman Jon Leibowitz said in a press release.
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