FTC delays Red Flags Rule enforcement until June 1

The Federal Trade Commission (FTC) has once again delayed enforcement of the new Red Flags Rule. The rule requires creditors and financial institutions to develop and implement written identity theft prevention programs. Organizations now have until June 1 to be in compliance.

The federal Red Flags Rule applies to entities that qualify as “creditors” or maintain “covered accounts.” Your city is subject to the rule as a “creditor” if residents use city-provided water, electricity, gas, or steam and pay for it later. Similarly, your city utility has “covered accounts” under the rule if your city defers payment for utility services. Other city activities (for example, classes at the community center) may also come under the purview of the rule if your city defers payments and those accounts involve multiple payments or transactions—or if there is a foreseeable risk of identity theft related to particular accounts.