FTC delays Red Flag Rules enforcement ... again

IdentityTheft — Fri, 01 May 2009 18:01:00 GMT

The Federal Trade Commission has granted yet another delay in the enforcement of the Red Flag Rules, pushing the deadline to November 1, 2009.

The initial compliance deadline was November 2008, but after five years of procrastination, retailers, health care providers and law firms that extend credit claimed to be surprised to learn they were considered creditors, and asserted they needed more time to devise their identity theft recognition and prevention strategies.

In response to their well-funded hue and cry, the FTC allowed creditors another six months to comply and moved the deadline to May 1, 2009.

The red flags businesses and creditors are to watch for are pretty straightforward:

Identifying documents that appear fraudulent (If it looks like the fake ID you used to buy beer as a college student, consider that it might be a fake ID.)
Photo IDs that don’t match the person offering them (If a white man offers a driver’s license with a picture of a black woman on it, that should be a red flag.)
Repeated or unreported changes of address (An established client’s address is changed to that of a storage facility.)
Unusual use of established account (a client’s increase in credit usage or change in usage pattern, e.g., a customer who historically paid off low account balances monthly suddenly exceeds allowed maximum balance.)
Fraud alert or freeze on a credit report (If a credit check reveals the credit applicant has been a victim of identity theft, consider the possibility that the person asking you to extend credit might not who they say they are.)

The Rules were established by the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), in an effort to force businesses to better protect consumers from identity theft and credit fraud. While creditors will undoubtedly accept the delay gratefully, it does make a thinking person question the sincerity of the FTC’s stated intent of protecting consumers.

ID theft : ID theft, identity theft protection, Fair and Accurate Credit Transactions Act

FTC delays Red Flag Rules enforcement ... again