New Delay in Red Flag Rules May Not Apply to Background Checks

According to a press release issued by the Federal Trade Commission (FTC) on 04/30/2009, the FTC, “will delay enforcement of the new “Red Flags Rule” until August 1, 2009, to give creditors and financial institutions more time to develop and implement written identity theft prevention programs.” 

Employers and background screening firms that belive this gives them more breathing room before compliance should proceed with caution.  The FTC noted that the issues dealt with certain firms that were uncertain of their status.  The duties of employers when it comes to screening are clear.  In addition, ESR has received legal advice suggesting it is not at all clear the delay would affect background screening  reports that contains an employment credit reports.

In order to fully protect employers and job applicants from the harms associated with identity theft, ESR has determined that the best practice is to continue to operate as though the Red Flag rules continue to apply. The effort needed for compliance is minimal compared to the risks of non-compliance. 

ESR will continue to “Red Flag” credit reports where there is a substantial address discrepancy and will continue client education on the mater.

For more on the Red Flag rules, see the ESR newsletter at: http://www.esrcheck.com/newsletter/archives/October_2008.php#T1

ESR provides training and sample Red Flag policies for its clients.