Fair and Accurate Credit Transactions (FACT) – Identity Theft Red Flags Rule, 16 CFR 681.2; FTC Enforcement Policy

Due to the growing problem of identity theft, the Federal Trade Commission developed the new Red Flags Rule pursuant to the Fair and Accurate Credit Transactions (FACT) Act of 2003. The Rule states that all creditors, credit unions and financial institutions must develop and provide identity theft services and prevention programs for their customers.

According to Federal law, a creditor is defined as: any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit.

The FTC is providing an e-mail address to answer questions about the new Identity Theft Red Flags Rule; RedFlags@ftc.gov.

On October 22, 2008, the FTC announced that it will not enforce the Red Flag Rules until May 1, 2009, in order to give companies under its jurisdiction an additional six (6) months to comply. The announcement does not affect companies subject to the enforcement authority of federal agencies other than the FTC. To view the recent announcement visit: www.ftc.gov/opa/2008/10/redflags.shtm.