Worthy Read: Small Businesses May Get Exemption from ID Theft Rules

The Red Flags Rule, which tackles identity theft issues, has already gotten pushed back a number of times by the FTC, and now, it appears it may not even apply to certain companies.

From SC Magazine:

The U.S. House of Representatives this week unanimously passed legislation that would exempt certain small organizations from complying with the Red Flags Rules.

The rules, developed in accordance with the Fair and Accurate Credit Transactions Act of 2003 (FACTA), require financial institutions and other organizations classified as “creditors” to develop programs to identify, detect and respond to indications of identity theft. A bill passed this week would amend FACTA and exclude health care, accounting and legal practices with 20 or fewer employees from having to comply with the regulations, set to be enforced starting next month.

Read the entire article by Angela Moscaritolo here.

Read more about the Rule here and here.

Tags: ftc, red.flags.rule

Comment by Debbie Snyder on October 25, 2009 at 10:57pm: Two major problems with this legislation.

1. The last sentence of the proposed bill eliminates all prior excluions ans replaces them with this set of exclusions.

2. Other than the health care exemption, the others are dependant on the FTC deciding that those businesses do not often see indications of fraud, otherwise the exclusion doesn't apply no matter what your size. Now if the CFPA passes, that determination would suddenly fall under the auspices of an organization which is dead set against all business entities. Which likely means that there will be no approved exclusions.

Good idea - badly written proposed legislation.