Posted Date:June 14, 2010
|Author:||Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid|
Subject: Update on FTC "Red Flags Rule" that Applies to Institutions Participating in the Perkins Program
We previously posted electronic announcements on October 14, 2008, November 7, 2008, May 21, 2009, and May 6, 2010, about the Identity Theft Red Flags Rule ("Red Flags Rule") that was issued on November 9, 2007 by the Federal Trade Commission (FTC) (72 Fed. Reg. 63718). The "Red Flags Rule" requires financial institutions and creditors to develop and implement a written identity theft prevention program to detect, prevent, and respond to patterns, practices, or specific activities that may indicate identity theft. The "Red Flags Rule" applies to institutions participating in the Federal Perkins Loan Program and may also apply to other programs administered by an institution. The "Red Flags Rule" became effective January 1, 2008 with a mandatory compliance date of November 1, 2008.
The purpose of this announcement update is to inform institutions participating in the Federal Perkins Loan Program that the FTC has granted another delay of enforcement of the new "Red Flags Rule" through December 31, 2010. This does not mean that the "Red Flags Rule" is not in effect, but only that the FCC will not enforce the rule through December 31, 2010. Further information about the delay of enforcement of the "Red Flags Rule" is available on the FTC Web site at http://www.ftc.gov/opa/2010/05/redflags.shtm.
Although the "Red Flags Rule" was not issued by the Department of Education, we are providing a helpful reminder and update to institutions participating in the Federal Perkins Loan Program.