NLBMDA ALERT: FTC Delays Enforcement of Red Flags Rule Until June 1, 2010

The Federal Trade Commission has announced another delay in its enforcement of the "Red Flags" Rule, which requires creditors to have Identity Theft Prevention Programs. The FTC is now delaying enforcement of the new rule until June 1, 2010, to give creditors additional time in which to develop and implement written identity theft prevention programs. The last deadline was November 1, 2009.

On November 9, 2007, the FTC published the final Identity Theft Red Flags regulations and guidelines. The rule, promulgated pursuant to the Fair and Accurate Credit Transactions Act of 2003 (FACTA), requires creditors to develop and implement written "identity theft prevention programs." The programs must provide for the identification, detection, and response to patterns, practices, or specific activities - known as "red flags" - that could indicate identity theft.

Additional information on the rule can be found on the NLBMDA website, www.dealer.org, in the "Government Affairs" section.

See the full text of the FTC release announcing the delay in enforcement at: http://www.ftc.gov/opa/2009/10/redflags.shtm. They have also now established a compliance site for businesses at http://www.ftc.gov/redflagsrule.

Read the original here.

Red Flags Rule Postponed Until November

The Federal Trade Commission (FTC) announced that it would further delay enforcement of the "Red Flags" Rules by another three months, from August 1 to November 1, 2009. The commission also announced that it would be doing more to inform small businesses and other entities about compliance on this issue. The FTC also wants to smooth the way for easier compliance by offering additional resources and guidance to clarify whether businesses are covered and what they must do to comply.

"Although many covered entities have already developed and implemented appropriate, risk-based programs, some—particularly small businesses and entities with a low risk of identity theft—remain uncertain about their obligations," said the FTC in a release. "The additional compliance guidance that the Commission will make available shortly is designed to help them."

The FTC has provided a set of FAQs for the guidelines that address how the agency intends to enforce the Rules, noting that "Commission staff would be unlikely to recommend bringing a law enforcement action if entities know their customers or clients individually, or if they perform services in or around their customers' homes, or if they operate in sectors where identity theft is rare and they have not themselves been the target of identity theft."

The full set of FAQs can be found here.

Thank you to the Mid-America Lumbermen's Association for this updated information.

News You Can Use

Gov't expands housing plan, off to slow start
Source: Associated Press/AP OnlinePublication date: May 14, 2009
By ALAN ZIBEL

For the past two months Rose Inman hoped she could benefit from President Barack Obama's plan to help homeowners avoid foreclosure. Now it appears to be too late.
Aurora Loan Services is set to foreclose on her home overlooking Seattle's Puget Sound on Friday. Despite numerous calls, e-mails and letters, she says she's only been able to have one phone conversation with a company representative. Read more.



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Researchers for the Internet real estate marketing company quizzed almost 1,400 homeowners around the country in early April about where they thought the housing market was headed. Read more.

From the National Association of Credit Managers (NACM)
FTC Releases "Red Flags" Template for Entities That Have Low-risk of Identity Theft
To help entities that have a low risk of identity theft – such as businesses that know their customers personally – the Federal Trade Commission has created a template that guides such businesses and organizations in developing written identity theft prevention programs to comply with the Red Flags Rule. “Create Your Own Identity Theft Prevention Program: A Guided 4-Step Process,” is available at www.ftc.gov/bcp/edu/microsites/redflagsrule/get-started.shtm. The template has guidance and instructions that enable companies to complete and print the fill-in-the-blank form online. Under the Fair and Accurate Credit Transactions Act of 2003, the Rule requires many businesses and organizations to implement a written Identity Theft Prevention Program to detect the warning signs (“red flags”) of identity theft. By identifying red flags, these entities will be in a better position to spot an imposter trying to defraud them by using someone else’s identity to get products and services.

Find templates here.

NLBMDA ALERT: FTC Grants Three-Month Delay in Enforcement of Red Flags Rule

From NLBMDA

The Federal Trade Commission has announced another delay in its enforcement of the "Red Flags" Rule, which requires creditors to have Identity Theft Prevention Programs. The FTC is now delaying enforcement of the new rule until August 1, 2009, to give creditors additional time in which to develop and implement written identity theft prevention programs. The original deadline was November 1, 2008.

On November 9, 2007, the FTC published the final Identity Theft Red Flags regulations and guidelines. The rule, promulgated pursuant to the Fair and Accurate Credit Transactions Act of 2003 (FACTA), requires creditors to develop and implement written "identity theft prevention programs." The programs must provide for the identification, detection, and response to patterns, practices, or specific activities - known as "red flags" - that could indicate identity theft.

The FTC apparently agrees with NLBMDA and several other trade groups that voiced concerns with the FTC regarding ambiguities in the new rule and the lack of specific guidance from the FTC for businesses that may extend types of credit to its business customers.

"Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the Red Flags Rule will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs, and give Congress time to consider the issue further," FTC Chairman Jon Leibowitz said.

NLBMDA has prepared a sample Red Flags Compliance Program for LBM dealers, which can be downloaded here. Additional information on the rule can be found on the NLBMDA website, www.dealer.org, in the "Government Affairs" section. See the full text of the FTC release announcing the delay in enforcement at: http://www2.ftc.gov/opa/2009/04/redflagsrule.shtm. They have also now established a compliance site for businesses at http://www.ftc.gov/redflagsrule.

Stay Up to Date on Regulations

Use these links to stay up to date on regulatory changes that affect your business.

Red Flags Rule
The Federal Trade Commission has developed rules intended to address identity theft. Financial institutions and creditors will be required to implement programs to detect, prevent and mitigate instances of identity theft. The programs must be in place by May 1, 2009 and must provide for the identification, detection and response to patterns, practices, or specific activities - known as "red flags" - that could indicate identity theft.

New Georgia Lien Laws
Busch & Reed Law provides a detailed explanation of the new Georgia Lien Laws that took effect on March 31, 2009. There is a new sample claim of lien form that you can customize for your own available. To obtain that via email, email lisagolden@gocsa.com .

COBRA
The recent stimulus legislation contained some important changes to COBRA health care coverage originally passed in 1986. COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates by paying their employer the premium plus some administrative costs. Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA, although some states have COBRA-like requirements too with different thresholds. The new law includes an enhancement - a temporary 65 percent subsidy for COBRA premium payments for nine months. (Read the full article)

Weatherization Grants
The Department of Energy recently announced it will invest nearly $8 billion in state and local weatherization and energy efficiency efforts as part of the recent stimulus legislation (The American Recovery and Reinvestment Act). The funds will be divided between the Weatherization Assistance Program, which will receive nearly $5 billion, and the State Energy Program, which will receive up to $3 billion. DOE says this will help families save hundreds of dollars every year on their energy bills, while creating approximately 87,000 jobs. To jump-start the job creation and weatherization work, DOE is releasing $780 million in the next few days, and will release more as the states demonstrate that they are using the funding effectively.

Red Flags Rule: How to Use the How To Guide

If you click on the picture, it will take you to a PDF of the How-to Guide for Business. Once there, you will find the most helpful how to information beginning on page 14 of the Guide.


HOW TO COMPLY: A FOUR STEP PROCESS

Step One: Identify relevant red fl ags. Identify the red fl ags of identity theft you’re likely to come across in your business.

Step Two: Detect red fl ags. Set up procedures to detect those red fl ags in your day-to-day operations.

Step Three: Prevent and mitigate identity theft. If you spot the red fl ags you’ve identifi ed, respond appropri- ately to prevent and mitigate the harm done.

Step Four: Update your Program. The risks of identity theft can change rapidly, so it’s important to keep your Program current and educate your staff .

Get the free guide here. (Remember - the really helpful info starts on page 14!)

Overview of Red Flags Rule

This is an excerpt from the Fighting Fraud with the Red Flags Rule How-to Guide for Business

The Red Flags Rule sets out how certain businesses and organizations must develop, implement, and administer their Identity Theft Prevention Programs.

Your program must include four basic elements, which help you to address the threat of identity theft.

#1 - Policies and Procedures for Identifying Red Flags
Your program must include reasonable policies and procedures to identify the "red flags" of identity theft you may run across in the day-to-day operation of your business.

Red flags are suspicious patterns or practices, or specifi c activities, that indicate the possibility of identity theft.

For example, if a customer has to provide some form of identifi cation to open an account with your company, an ID that looks like it might be fake would be a "red fl ag" for your business.

#2 - Detection of Red Flags
Your program must be designed to detect the red fl ags you’ve identified.

For example, if you’ve identified fake IDs as a red flag, you must have procedures in place to detect possible fake, forged, or altered identifi cation.

#3 - How Will You Deal with Red Flags?
Your program must spell out appropriate actions you’ll take when you detect red flags.

#4 - How Will You Re-Evaluate Your Program and Modify It, As Needed?
Identity theft is an ever-changing threat so you must address how you will re-evaluate your program periodically to reflect new risks from this crime.

Just getting something down on paper won’t reduce the risk of identity theft. That’s why the Red Flags Rule sets out requirements on how to incorporate your Program into the daily operations of your business.

Your board of directors (or a committee of the board) has to approve your first written program. If you don’t have a board, approval is up to an appropriate senior-level employee.

Your program must state who’s responsible for implementing and administering it effectively.

Because your employees have a role to play in preventing and detecting identity theft, your Program also must include appropriate staff training.

If you outsource or subcontract parts of your operations that would be covered by the Rule, your Program also must address how you’ll monitor your contractors’ compliance.

The Red Flags Rule gives you the flexibility to design a program appropriate for your company – its size and potential risks of identity theft.

While some businesses and organizations may need a comprehensive program that addresses a high risk of identity theft in a complex organization, others with a low risk of identity theft could have a more streamlined program.

Red Flags Rule In Effect May 1, 2009

The Red Flags Rule requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs – or "red flags" – of identity theft in their day-to-day operations. Are you covered by the Red Flags Rule? Read Fighting Fraud with the Red Flags Rule: A How-To Guide for Business to:

*Find out if the rule applies to your business or organization;
*Get practical tips on spotting the red flags of identity theft, taking steps to prevent the crime, and mitigating the damage it inflicts; and
*Learn how to put in place your written Identity Theft Prevention Program.

By identifying red flags in advance, you'll be better equipped to spot suspicious patterns when they arise and take steps to prevent a red flag from escalating into a costly episode of identity theft. Take advantage of other resources on this site to educate your employees and colleagues about complying with the Red Flags Rule.

To learn more, visit this website put together by the Federal Trade Commission.

The full guide is here as a PDF file.

This article by The “Red Flags” Rule: Are You Complying with New Requirements for Fighting Identity Theft? by Tiffany George and Pavneet Singh is an easy to read explanation of who must comply and how they must do it.