The Federal Trade Commission has again delayed enforcement of the Red Flags Rule. Enforcement is now set to take effect June 1, 2010.

The rule requires financial institutions and creditors with covered accounts to implement written identity theft prevention programs to identify, detect, and respond to "red flags" that could signal identity theft. The rule originally went into effect on January 1, 2008, with mandatory compliance set for November 9, 2008. But enforcement was then delayed until November 1, 2009.

To read the Ballard Spahr alert dated October 26, 2009, which described the rule, click here.

The latest delay came at the request of members of Congress. There have been continued concerns that small businesses and other companies be given enough time to determine whether they are covered by the rule and what they must do to comply. For the FTC Web site on the Red Flags Rule, click here. To read the FTC announcement of the latest delay, click here.

For assistance in determining whether your business or specific accounts are covered by the Red Flags Rule or in identifying relevant red flags and preparing an appropriate identity theft prevention program, contact John L. Culhane, Jr. (215.864.8535 or culhane@ballardspahr.com), Shannon D. Farmer (215.864.8221 or farmers@ballardspahr.com), Jean C. Hemphill (215.864.8539 or hemphill@ballardspahr.com), or Mark J. Furletti (215.864.8138 or furlettim@ballardspahr.com).


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