It’s impossible to write about the Red Flag Rules without an apologetic “stop me if you’ve heard this one before” preface. So don’t shoot the messenger, but the deadline for the Feds’ identity-protecting Red Flag Rules has been delayed. The newest deadline—the fifth—replaces the January 1 deadline with one of June 1, 2010.

Congress created the program in 2003 in an attempt to stem the tide of identity theft by forcing creditors to use a common sense approach to identity theft prevention. It was originally slated to take effect in November 2008.

From its inception the rules have met with formidable pushback from the American Medical Association, the American Bar Association and the nation’s bankers, each group taking exception to the FTC’s interpretation of “creditor.”

According to the FTC, anyone who provides goods or services but allows for later payment is a creditor, but the FTC website explains the delays are because of an “ongoing debate about whether Congress wrote this provision too broadly.”

Ironically, the Red Flag Rules aren’t particularly onerous; they require only that businesses have written policies for recognizing signs of identity theft, training programs for their employees and response plans. In most cases, the entire process can be contained in a one-inch binder at the front desk or presented to employees within five minutes.

Perhaps the real contention is that powerful lobbies represent the doctors, attorneys and bankers that refuse to be regulated. Perhaps they don’t particularly care that the identity theft of millions of Americans could have been prevented since 2003 if only creditors were willing to take common sense steps to protect them.

Anybody want to place money on whether the Red Flag Rules take effect June 1?

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