Washington - The Red Flags Rule will not go into effect until Aug. 1 to give creditors and financial institutions more time to develop and implement written identify-theft prevention programs.
WASHINGTON — The Red Flags Rule will not go into effect until Aug. 1 to give creditors and financial institutions more time to develop and implement written identity-theft prevention programs, the Federal Trade Commission announced.
Not only will that give businesses an opportunity to get their programs in order, but it also will allow them to view a soon-to-be-released template that will help them comply with the new law.
Veterinary practices will be able to follow the template.
The Fair and Accurate Credit Transactions Act of 2003 (FACTA) directed financial regulatory agencies, including the FTC, to promulgate rules requiring "creditors" and "financial institutions" with covered accounts to implement programs to identify, detect and respond to patterns, practices, or specific activities that could indicate identity theft.
FACTA's definition of "creditor" applies to any entity that regularly extends or renews credit or regularly permits deferred payments for goods or services. Accepting credit cards as a form of payment does not, by itself, make an entity a creditor, but businesses that provide services and bill later, including veterinarians, lawyers, doctors and other professionals, are included.
A Web site with more resources to help covered entities design and implement identity-theft prevention programs is available at www.ftc.gov/redflagsrule. The compliance template will be available on that site as well.