FTC Delays Enforcement of Red Flags Rule

The FTC has announced it is delaying enforcement of the Red Flags Rule, which aims to prevent identity theft, until the end of the year.

The move came after members of Congress requested additional time to consider legislation that would affect the scope of entities covered by the rule, the FTC said in the release.

The American Medical Association, as well as other medical and dental groups, had previously called upon the FTC to exempt physicians from the rule completely.  Last week, the AMA filed a lawsuit asking a federal court to prevent the FTC from applying the rule to physicians.

The rule, developed under the Fair and Accurate Credit Transactions Act, requires all entities defined as "creditors" or "financial institutions" to develop and implement written identity theft prevention programs to respond to "red flags" that could indicate identity theft, according to the FTC release.

The FTC urged Congress to quickly enact legislation to clarify which groups would be covered by the rule and noted that if legislation contains an effective date earlier than Dec. 31, 2010, that the rule would be enforced as of that date.

Read the FTC news release on the delay of the Red Flags Rule.