November 6, 2009 – ALERT – Red Flags Rule Delayed Again
The Federal Trade Commission (“FTC”) has once again delayed enforcement of the Identity Theft Red Flags Rule (the “Red Flags Rule”). The Red Flags Rule originally became effective January 1, 2009, but the FTC had previously delayed enforcement until November 1, 2009. The FTC has now further delayed enforcement until June 1, 2010. The delay appears to have been caused, in part, by additional developments in Congress regarding the scope of the law.
In general, the Red Flags Rule requires certain “financial institutions” and “creditors” to implement identity theft programs. In some cases, the Red Flags Rule may apply to sponsors and/or third party administrators of employee benefit plans, particularly if participants of the plan are able to use debit cards to obtain benefits.
We will be distributing a more detailed alert describing the requirements of the Red Flags Rule and its application to the sponsors and administrators of benefit plans after the first of the year. In the meantime, please contact us if you have any questions regarding the rule
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The information contained in this ALERT is intended for general information purposes only and does not constitute legal advice relative to a specific situation.