The Federal Trade Commission has moved the compliance deadline for its “red flags” rule to Jan. 1, 2011. It was set to take effect on Tuesday.
The reason for the delay is to give Congress more time to consider legislation that would affect the scope of entities covered by the rule, the commission said.
“Congress needs to fix the unintended consequences of the legislation establishing the Red Flags Rule – and to fix this problem quickly,” FTC Chairman Jon Leibowitz said in a statement. “As an agency we’re charged with enforcing the law, and endless extensions delay enforcement.”
The rule requires “creditors” and “financial institutions” that have “covered accounts” to develop and implement written identity theft prevention programs to help identify, detect, and respond to “red flags” that could indicate identity theft, according to the agency. Physicians, nursing homes and other healthcare facilities could fall into this category since they routinely provide services for which they are reimbursed at a later date. A number of medical groups recently filed a lawsuit in a Washington D.C. court seeking exemption from the rule.
