The Federal Trade Commission (FTC) has published its Interim Final Rule on identity theft “red flags.” The interim rule revises the scope of entities covered by the rule, following Congressional legislation in 2010 narrowing the definition of “creditors.” Congress directed the FTC and several banking agencies to develop regulations requiring financial institutions and creditors to develop and implement a written identity theft prevention program. Under the amended rule, creditors are only covered if they regularly obtain or use consumer reports in credit transactions; provide information to consumer reporting agencies “in connection with a credit transaction,” or advance funds “to or on behalf of a person.” A 60-day comment period and review precede the rule’s finalization.
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