Red Flag Rules - UPDATED!!!
After receiving several inquires regarding the Red Flag Rules, we feel it is important to relay this important information to you:
The Federal Trade Commission (FTC) has issued regulations regarding fraud and identity theft prevention. Known as the "Red Flag Rules," the Fair and Accurate Credit Transactions (FACT) Act of 2003 requires all entities that extend credit to consumers to develop and officially adopt an "Identity Theft Prevention Program" by November 1, 2008. However, due to confusion over the regulation's definition of "creditor," this deadline has been postponed by the FTC until June 1, 2010. According to the FTC, the term "creditor" refers to "any entity that regularly extends, renews, or continues credit." A "covered account" is "an account used mostly for personal, family, or household purposes, and that involves multiple payments or transactions." If you receive payment after providing goods and/or services to consumers by maintaining Accounts Receivable, you may be required to comply with the FACT Act. Please note, accepting credit cards as a form of payment does NOT meet the definition of "credit" as established by the FTC.
Please note, your Identity Theft Prevention Program must be written and formally adopted by your board of directors, shareholders, or partners by the June 1, 2010 compliance deadline. If you have not developed a plan already, please do so immediately.
For more information about the Red Flag Rules and compliance guidelines, please download this informational pamphlet from the FTC. You may also want to review this compliance model distributed by the National Rural Water Association. This model was specifically designed for water utility providers, but can be adapted for almost any business model and industry.
If you have any questions regarding the Red Flag Rules or what they mean to you, please contact our office at (717) 336-3801.
