FTC to Enforce 'Red Flags Rule' as of November 1

Effective November 1, 2009, the U.S. Federal Trade Commission's Red Flags Rule will require jewelry businesses that extend credit to consumers or to other businesses to implement a written Identity Theft Prevention Program. The goal of the program, explains the Jewelers Vigilance Committee (JVC), is to prevent thieves from stealing identity information for fraudulent purposes and to detect and prevent efforts to steal identity data to perpetrate identity theft. 

To help jewelers develop their own Red Flags Identity Theft Prevention Programs, the JVC has put together a Red Flags Rule Compliance Kit on CD.

Under the law, companies may comply if they offer credit to their customers, either through in-house financing, branded credit card programs or any other credit arrangement. This includes companies that sell using "memo." 

Jewelry businesses that only accept credit cards as a form of payment are not considered creditors and therefore do not have compliance obligations.