New article about Red Flag Rules going into effect

Here's a quote from an article written by Susan M. Wissink and Mark R. Bolton about the new Red Flag Rules going into effect soon.

"The Federal Trade Commission ('FTC') recently enacted rules that will require many businesses and other organization to implement a written identity theft prevention program designed to identify and detect warning signs of identity theft. All businesses and organizations subject to the 'Red Flag Rules' must have their identity theft prevention program drafted and in place by August 1, 2009. The FTC can obtain penalties of $3,500 per knowing violation of the Red Flag Rules.

All businesses and organizations that meet the rules' definition of 'creditors' or 'financial institutions' and maintain 'covered accounts' are required to implement an identity theft prevention program. The term 'creditor' is defined broadly and includes businesses or organizations that defer payment for goods or services or provide goods or services and bill customers later. This definition could apply to everyone from healthcare providers to non-profit groups, government agencies, telecommunications companies, and homebuilders. The term 'creditor' is further defined to include organizations that regularly grant loans, arrange for loans or the extension of credit, or make credit decisions, including automobile dealers, mortgage brokers, mortgage bankers, real estate agents, finance companies, and retailers that offer financing or help consumers obtain financing from another organization.

Additionally, all 'financial institutions' may be subject to the Red Flag Rules. The rules define 'financial institution' as any bank, savings and loan association, mutual savings bank, credit union, or institution that maintain deposits or accounts from which the account holder is permitted to make withdrawals by negotiable or transferable instrument. The extremely broad application of the Red Flag Rules will catch many businesses and organizations off guard. Simply deferring payment for goods or services provided may require a business to implement a written Identity Theft Prevention Program."

The full article can be read here - http://www.endonurse.com/hotnews/ftc-identity-theft-rules.html.