By: KIMBERLY ATKINS, BridgeTower Media Newswires//January 3, 2013//
By: KIMBERLY ATKINS, BridgeTower Media Newswires//January 3, 2013//
The Federal Trade Commission has issued an interim final rule narrowing the breadth of those covered under the anti-identity theft “red flags” rule.
The rule was adopted in an effort to thwart identity theft at financial institutions and other entities where consumer credit information is obtained and stored in the normal order of business. It requires creditors, including certain businesses that accept deferred payments from clients, to create detailed written policies outlining how they will prevent, detect and address identity fraud.
After the rule was first issued, attorneys and other professionals challenged the FTC’s authority to issue such a regulation. Congress subsequently passed the Red Flag Program Clarification Act, which exempts attorneys and certain other professionals from the rule.
The new interim regulation narrows the circumstances under which creditors are covered by the rule. According to the FTC, creditors are covered only if, in the ordinary course of business, they obtain or use consumer reports in connection with a credit transaction, furnish information to consumer reporting agencies in connection with a credit transaction or advance funds to or on behalf of a person in certain situations.
The Interim Final Rule is scheduled to take effect Feb. 11.