Congress has once again delayed implementation of the Red Flag rules.
Now the Red Flag rules do not go into effect until Dec 31, 2010.
For many this is a big sign of relief…one more regulation we can delay worrying about.
Here are the realities:
- Red Flag Rules parallel HIPAA Regulations – that is, it is about privacy and preventing identity theft
- Red Flag Rules make business sense – OK, maybe as Congress write them they don’t make business sense, but the big picture makes sense.
I’m sure you’ve heard of some of these big companies having their credit card processing systems hacked into…you don’t want this to be you.
In our area, a local restaurant recently had to go on the news and announce their credit card processing system had accidentally transmitted card info and all patrons over a certain period should go get new credit cards.
This is BAD PR.
We understand that the acceptance of credit cards, is not in and of itself, make a business subject to Red Flag rules, but it all falls under the similar philosophy – protect your customer’s information!
Will Red Flag rules help prevent this?
In theory they should, but Congress could blow this effectiveness out of the water.
We’ll follow this up with some “common sense” steps to help you move toward Red Flag compliance without the pain.