ME&MEE

Confusion over which entities must comply with the FACT Act’s Identity Theft Red Flags Rule has led the FTC to delay enforcement until May 1, 2009.  Previously, the Rule was scheduled to become enforced on November 1st of this year. 

Much of the confusion comes from educational institutions, which are not in their primary functions, creditors or financial institutions.  However,  if they participate in the Federal Perkins Loan Program or in other ways are “loaning” and “collecting” money to allow students to attend their programs, they could be considered to fall under the Red Flags Rule.

President Bush’s Identity Theft Task Force released information that convictions by the Department of Justice of identity theft increased by 27% in 2007 with a total of 2,470 defendants and 1,943 convicted.  That number still can’t account for the millions of identity theft cases every year, and the task force is recommending further steps by federal and state agencies to deter potential identity thiefs with stiff penalties.

November 1, 2008 is the deadline for compliance of the “Identity Theft Red Flags” rules.  These new rules are being required of financial institutions and creditors and are intended to help prevent identity fraud.  Businesses included under these regulations will not only have to have a plan for how to respond to identity theft, but document that they know where their data is and how to protect it.  More details on what these rules are and what businesses will have to do to be compliant can be found in SC Magazine.

As a follow up to our last post, President Bush has indeed signed into law tougher measures for punishment of cybercriminals. (The Identity Theft Enforcement and Restitution Act of 2008).