Definitions

According to the Federal Trade Commission’s (FTC’s) website, the definition of “creditor” is broad and includes businesses or organizations that regularly provide goods or service first and allow customers to pay later.  Examples of groups that may fall into this definition are utilities, health care providers, lawyers, accountants, and other professionals, and telecommunications companies.

A “financial institution” is defined as: 1) a state or national bank, 2) a state or federal savings and loan association, 3) a mutual savings bank, 4) a state or federal credit union, or 5) any other entity that directly or indirectly holds a “transaction account” belonging to a consumer.  “Transaction accounts” are deposits or accounts from which a consumer can make payments or transfers to third parties.  Banks, federally chartered credit unions, and savings and loans are under the jurisdiction of the federal bank regulatory agencies or the National Credit Union Administration. The FTC’s jurisdiction extends to state chartered credit unions and other institutions that hold transaction accounts. 

“Covered account” is defined as either: 1) consumer accounts designed to permit multiple payments or transactions, or
2) any other account that presents a reasonably foreseeable risk from identify theft.

Red Flags Rule information

Who needs to comply?

How will compliance be enforced?

Helpful links