April 28, 2009
FTC ‘Red Flags’ rule enforcement begins this week
UPDATE: FTC grants 3-month extension on Red Flags rule enforcement The Federal Trade Commission (FTC) announced April 30 that it would push back its enforcement deadline for the identity-theft-related Red Flags rule until Aug. 1. This information became available after NEWStat’s press time. Read more on the extension here. On May 1, the Federal Trade Commission (FTC) will begin enforcement of the new “Red Flags” Rule. The rule applies to certain types of businesses – including many veterinary practices - and is designed to help detect and stop identity theft. Does your practice need to comply with the rule? The key to the answer lies in two points: If you are a “creditor,” and you have “covered accounts” as defined by the rule, then your practice must comply. According to the FTC rule, the term “creditor” includes “businesses or organizations that regularly defer payment for goods or services or provide goods or services and bill customers later.” Accepting credit cards as payment does not necessarily qualify you as a creditor, but if you allow clients to pay off their bills over time, or if you bill clients after services are performed, then you are a creditor.