Red Flags rule delayed until June 2010

Article

National Report -- A new federal rule aimed at preventing identity theft has been postponed for a third time.

National Report

-- A new federal rule aimed at preventing identity theft has been postponed for a third time.

The Federal Trade Commission (FTC) announced Oct. 30 that the Red Flags Rule, set to go into effect Nov. 1, will not be fully enforced until June 1, 2010. The latest delay comes at the request of Congress, says the FTC, and applies to financial institutions and creditors.

U.S. District Court for the District of Columbia also ruled Oct. 30 that the Red Flags Rule is not applicable to attorneys. But the FTC says the new delay in enforcement for other professions does not affect the separate timeline any possible appeals or "other federal agencies’ ongoing enforcement for financial institutions and creditors subject to oversight."

Identity-theft complaints swelled in 2008 to more than 10 times the number posted in 2000 -- from 31,140 to 313,982 cases in just eight years, according to the Consumer Sentinel Network (CSN). CSN compiles consumer complaints from the Federal Trade Commission (FTC), the Better Business Bureau and other consumer watchdogs.

These statistics, FTC says, are a reminder of how important it is for businesses to make plans early to fight identity theft. It's also the impetus behind FTC's Red Flags Rule. The rule, developed in 2003 by the FTC and other regulatory agencies, went into effect last November, requiring businesses offering credit to develop protocols and implement best practices to prevent identity theft, but it has never been enforced.

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