Red Flag Enforcement Delayed Fourth Time (until June 1, 2010)

The enforcement of the Red Flags rule under the Fair and Accurate Credit Transactions Act (FACTA) has been delayed again for the fourth time. The next implementation date is June 1, 2010. The enforcement was due to take place yesterday November 1st, 2009.

It is clear that many businesses are having difficulty getting ready for Red Flags as evidenced by the fourth delay. Many businesses falsely assume that if they are not a bank nor a credit card company, they are not subject to FACTA or Red Flags. Such is not the case. FACTA and Red Flags apply to most businesses.

The delay is good for businesses as many need additional time to get systems and procedures in order, but not good for consumers (whose identities may still be exposed for fraud for another 6 months).