Banks and Credit Unions Must Still Comply by November 1st
BRENTWOOD, Tenn., Oct. 28 /PRNewswire/ -- The Federal Trade Commission (FTC) recently announced that it will delay penalties until May 1, 2009 for organizations not in compliance with FACTA's Red Flag Rules. This provides a welcomed relief for those defined as "Creditors" who have been scrambling to achieve compliance by the November 1, 2008 deadline.
Organizations affected by the FTC's delay in enforcement include health care companies, vehicle dealers, utility companies, debt collectors and others. The reason cited for the extension was the lack of communication to organizations subject to the regulation -- many are unaware of its existence, or only recently learned that they must comply. Visit http://www.redflagrules.net to see the FTC press release and Enforcement Policy issued October 22, 2008.
The Red Flag Rules of the Fair and Accurate Credit Transactions Act (FACTA) requires financial institutions and creditors to implement a written identity theft prevention program. The purpose of this program is to detect identity theft, and if it is detected before damage occurs, to step in and prevent it. If identity theft is detected later, the requirement is to act quickly to mitigate the damage.
Along with the press release, the FTC published its Enforcement Policy. The main points are these:
1. This extension ONLY applies to organizations that are NOT under the jurisdiction of any of the other FACTA regulatory agencies other than the FTC. Therefore, financial institutions regulated by the OCC, FDIC, OTS or the NCUA are not excused from enforcement of the November 1, 2008 deadline, based on this notice.
2. This delay in enforcement is limited to the Identity Theft Red Flag Rules and does not extend to the rule regarding address discrepancies applicable to users of consumer reports, or to the rule regarding changes of address applicable to card issuers.
3. This is not an extension of the deadline. It is a forbearance, or delay of enforcement action, for violation of the Identity Theft Red Flag Rules until May 1, 2009. The result for many is the same -- extra time to achieve compliance -- but the message is clear: Creditors need to get their program in place as quickly as possible.
Since the announcement of FACTA Section 114 in October 2007, NXG Strategies, LLC, has been at the forefront of Red Flag legislation. In addition to its highly praised webinar series, NXG also has an end-to-end solution for detecting, preventing and mitigating identity theft plus templates for completing a written plan for Red Flag, including sample policies and procedures.
NXG Strategies, LLC is a pioneer in identity theft resolution and
corporate breach mitigation. Associations have partnered with NXG for
education and best-in-class Red Flag tools and solutions. For details about
NXG's Red Flag webinar series, complete solution for Red Flag, or
association sponsorship opportunities, visit http://www.redflagrules.net
and http://www.redflagsolutions.com or visit our corporate website at
Sally King - COO
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|SOURCE NXG Strategies, LLC|
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