“Red Flags” Rules
AICPA challenges application of "red flags rule" to CPAs
The AICPA filed a lawsuit in the U.S. District Court for the District of Columbia seeking an injunction barring the Federal Trade Commission from applying the “red flags rule” to CPAs.
Red flags rule enforcement extended until June 1, 2010
The Federal Trade Commission (FTC) delayed enforcement of the “red flags” rule until June 1, 2010, for financial institutions and creditors subject to enforcement. The FTC had previously delayed the enforcement of the red flag rules until Nov. 1, 2009. The current delay follows an Oct. 30, 2009, ruling from the U.S. District Court for the District of Columbia that the FTC may not apply the red flags rule to attorneys.
NEW: CPA firm identity theft prevention program guidance released
The Federal Trade Commission’s (FTC) “red flags” rule become effective Nov. 1. The AICPA has published free guides to help CPA firms develop and maintain an identity theft prevention program. The “red flags” rule requires “creditors” or “financial institutions” with covered accounts to have programs to assist in identifying a potential identity theft.
What are the “red flags” rules?
The Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (the red flags rules) requiring financial institutions and creditors to develop and implement written identity theft prevention programs, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003. “Financial institutions” include entities that offer accounts that enable consumers to write checks or make payments to third parties through other means, such as other negotiable instruments or telephone transfers.
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