FTC Red Flags identity theft protection rules to hit Nov. 1

Baring a last minute delay, the Federal Trade Commission is set to enforce its identity theft rules known as Red Flags on Nov. 1.


The rules have been delayed three times already and were originally set to become practice Nov. 1, 2008.

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Under the Red Flags rules all companies or services that regularly permit deferred payments for goods or services, including entities such as health care providers, attorneys, and other professionals, as well as retailers and a wide range of businesses that invoice their customers must develop a written program that identifies and detects the relevant warning signs - or "red flags" - of identity theft. These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program.
Computer World

Congress likely to modify Red Flags Rule

Some jewelry companies might be excluded

New York--In response to the concerns of small-business owners, the U.S. House of Representatives passed a bill on Oct. 22 allowing some companies to apply for an exclusion from the Red Flags Rule, according to the Jewelers Vigilance Committee (JVC).

The rule, to be enforced beginning Nov. 1, 2009, requires a business to establish an Identity Theft Prevention Program to detect "red flags" that might indicate a criminal's attempt to steal identity information, and to put in place a program to prevent such thefts.

According to the pending legislation, a company applying for an exclusion will qualify if it knows all of its customers or clients individually, or has not experienced incidents of identity theft and identity theft is rare for businesses of that type.

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