FTC Issues Interim Final Rule on Identity Theft Red Flags | Practical Law

FTC Issues Interim Final Rule on Identity Theft Red Flags | Practical Law

The FTC published an interim final rule on identity theft red flags. This rule makes the Red Flags Rule consistent with the Red Flags Program Clarification Act of 2010.

FTC Issues Interim Final Rule on Identity Theft Red Flags

Practical Law Legal Update 6-522-7707 (Approx. 2 pages)

FTC Issues Interim Final Rule on Identity Theft Red Flags

by PLC Intellectual Property & Technology
Law stated as at 30 Nov 2012 • USA (National/Federal)
The FTC published an interim final rule on identity theft red flags. This rule makes the Red Flags Rule consistent with the Red Flags Program Clarification Act of 2010.
On November 30, 2012, the FTC announced publication of an interim final rule on identity theft "red flags" amending its earlier Red Flags Rule. The Red Flags Rule seeks to promulgate regulations requiring financial institutions and creditors to develop and implement a written identity theft program. By identifying identity theft red flags, businesses can spot suspicious patterns and prevent potential problems from escalating. The amended rule makes the Red Flags Rule consistent with Red Flag Program Clarification Act of 2010, which effectively exempts service providers that only extend credit incidental to providing their services. Under the amended rule, a creditor is covered only if it regularly and in the ordinary course of business:
  • Obtains or uses consumer reports in connection with a credit transaction.
  • Furnishes information to consumer reporting agencies in connection with a credit transaction.
  • Advances funds to or on behalf of a person.
The FTC will accept comments on this interim final rule for 60 days, after which the rule will become final.