Small business owners have federal new requirements to protect against identity theft in their businesses.

According to the FTC, the red flags programs implemented by such businesses must:

This red flags rule initially covered any business or organization that had covered accounts. However, the red flags rule was recently modified on Dec. 31 2010. SC Magazine reports that the red flags rule has been modified so that lawyers, doctors, and accountants are exempt from having to comply with this rule.

Under the new law, only businesses and organizations that utilize consumer reports in conjunction with credit transactions, provide information to consumer reporting agencies, or loan money will be affected by the new red flags rule. This means that most small businesses that offer services may not have to comply with the red flags rule. 

Related Resources:

  • FTC “Red Flags” Rule Live on Nov 1st: Is Your Small Biz Covered? (FindLaw’s Free Enterprise Blog)
  • ABA Raises Red Flag Over New Rules on Identity Theft (FindLaw’s Strategist Blog)
  • Filings Support ABA Effort in Red Flags Rule Case (FindLaw’s Strategist Blog)

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