Statement by FTC Chairman Jon Leibowitz Regarding Court Ruling on Red Flags Rule

The U.S. Circuit Court of Appeals for the District of Columbia Circuit today issued its opinion and judgment in the matter of American Bar Association v. FTC. The Court held that, in light of the recent amendments to the Fair Credit Reporting Act, the ABA’s challenge to the FTC Red Flags Rule is moot. The court of appeals vacated the district court’s ruling, and remanded with instructions that the case be dismissed.

“Congress made a very good fix to a very badly written law,” FTC Chairman Jon Leibowitz said. “Not surprisingly, the DC Circuit vindicated the FTC’s position that the ABA’s case should be dismissed. The Commission will continue to carry out Congress’ directive to protect the American people from ID theft. We look forward to working with business and professional organizations to minimize compliance costs while safeguarding the public.”

Congress passed legislation resolving the uncertainty it created when it directed the federal financial institution regulatory agencies and the Federal Trade Commission to develop the Identity Theft Red Flags Rule, which requires many businesses and organizations to have a written Identity Theft Prevention Program designed to detect the warning signs – or “red flags” – of identity theft in their day-to-day operations. The legislation clarifies which entities must comply with the Rule.

The Rule doesn’t require any specific practice or procedures. It gives businesses the flexibility to tailor their written ID theft detection program to the nature of the business and the risks it faces. Businesses with a high risk for identity theft may need more robust procedures – like using other information sources to confirm the identity of new customers or incorporating fraud detection software. Groups with a low risk for identity theft may have a more streamlined program – for example, simply having a plan for how they’ll respond if they find out there has been an incident of identity theft involving their business.

 

IR Press

Share
Published by
IR Press

Recent Posts

OCC Announces Enforcement Actions for November 2024

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released enforcement actions taken against…

22 hours ago

Remarks by Secretary of the Treasury Janet L. Yellen on the 30th Anniversary of the Community Development Financial Institution Fund

As Prepared for Delivery Good afternoon. It’s an honor to welcome President Clinton to Treasury today…

2 days ago

Treasury Sanctions Gazprombank and Takes Additional Steps to Curtail Russia’s Use of the International Financial System

Treasury imposes sanctions on dozens of Russian banks, securities registrars, and finance officials; OFAC issues…

2 days ago

Acting Comptroller Testifies on State of the Federal Banking System

WASHINGTON—Acting Comptroller Michael J. Hsu today testified on the state of the federal banking system…

2 days ago

Remarks by Assistant Secretary for International Finance Brent Neiman on the U.S. Cross-Border Payments Agenda

As Prepared for Delivery Thank you very much for the opportunity to be here today, and…

4 days ago