ID Theft Protection Rules Delayed Again

The implementation of new identity theft protection rules by the Federal Trade Commission that were scheduled to go into effect today have, instead, been delayed for the fifth time, this time to Dec. 31, 2010.

The rules, when they are finally implemented, will require all financial institutions and creditors under the FTC’s jurisdiction to write and implement identity theft protection programs that include policies and procedures to identify, detect and address what the FTC has called “red flags” that may indicate that identity theft has or could occur. The new rules will also greatly expand the definition of financial institution and creditors to include professionals such as lawyers and accountants, an aspect that prompted the AICPA to file a lawsuit (explained in further detail in the Dec. 1 issue of the Trusted Professional) seeking exclusion from these regulations. Though the lawsuit is still ongoing, the AICPA, in April, did manage to convince a U.S. district court to delay enforcement for CPAs for an additional 30 days past the then-expected June 1 implementation date.

Outside the court battle, legislation that would exempt certain accountants (those with 20 or fewer employees) from the new rules has been introduced by Sen. John Thune (R – South Dakota) and is currently awaiting inspection from the Senate Banking Committee.