FTC Extends Deadline for Red Flags Rule

By William T. Koustas –      

Today, the FTC announced that it is delaying enforcement of the controversial Red Flags Rule (“the Rule”) until November 1, 2009.  The FTC press release states that it is extending the August 1, 2009 deadline, previously discussed in this blog, by three months to allow small businesses and low risk entities more time to develop and implement Identity Theft Prevention Programs.  In order to clear up the uncertainties many small businesses and low risk entities have with the Rule, FTC will also create additional compliance guidance and a special link for small and low risk entities on the FTC’s Red Flags Rule website.  It appears that the FTC was encouraged to extend the enforcement deadline by a request from the House Appropriations Committee to “defer enforcement in conjunction with additional efforts to minimize the burdens of the Rule on health care providers and small businesses with a low risk of identity theft problems.”  The American Bar Association and American Medical Association have also vigorously opposed the application of the Rule to lawyers and doctors and have requested a delay of its enforcement as well.