The U.S. Federal Trade Commission (FTC) announced July 29 that it would delay enforcement of its anti-identity-theft regulation, commonly known as the “Red Flags Rule.”
The rule was set to go into effect on Aug. 1, but will now be pushed back to Nov. 1. A news release on the FTC website says the decision to move back the deadline was so that the agency can “redouble its efforts” to educate small businesses and other organizations that need to abide by the rule.
The rule requires businesses and entities that are “creditors” with “covered accounts” to create an anti-fraud plan to detect “red flags” that could be signs of attempted ID theft. Many veterinary practices will be affected by the rule, since they offer credit to clients.
According to the FTC rule, the term “creditor” includes “businesses or organizations that regularly defer payment for goods or services or provide goods or services and bill customers later.” Accepting credit cards as payment does not necessarily qualify you as a creditor, but if you allow clients to pay off their bills over time, or if you bill clients after services are performed, then you are a creditor.
Covered accounts refers to “consumer accounts that allow multiple payments or transactions, or any other account with a reasonably foreseeable risk of identity theft,” according to the commission.
Additional reading:
AVMA Red Flags Rule summary
FTC FAQs on Red Flags Rule
FTC article: “The ‘Red Flags’ Rule: What health care providers need to know about complying with new requirements for fighting identity theft”