Today, at the last minute, the Federal Trade Commission (“FTC”) announced that it will delay enforcement of the new “Red Flags Rule” of the Fair and Accurate Credit Transactions Act of 2003 (the “Regulations”) until August 1, 2009. This extension of which is to give creditors and financial institutions more time to develop and implement written identify theft prevention programs.

The Regulations require creditors and financial institutions with certain types of accounts to implement programs to identify, detect and respond to patterns, practices or specific activities that could indicate identity theft. The FTC also plans to adopt a template to help institutions with low levels of risk to comply with the Regulations.

“Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the “Red Flags Rule” will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs and give Congress time to consider the issue further,” said FTC Chairman Jon Leibowitz.


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