FTC Issues New Credit, Endorsement Guidelines Affecting Jewelers

Effective November 1, the Federal Trade Commission’s (FTC) Red Flags Rule will require jewelry businesses that extend credit — to consumers or other businesses, including memo — to implement a written identity theft prevention program. The program is meant to prevent thieves from stealing identity information for fraudulent purposes and to detect and prevent efforts to steal identity data and perpetrate identity theft.

Examples of red flags include alerts from a credit reporting company about suspicious identification documents or Internet activity that indicates a third party’s attempt to access identification information. Jewelers Vigilance Committee (JVC) has prepared guides to help implement the program. Jewelry businesses that only accept credit cards for payment are not considered creditors and therefore, do not have to adhere to the new compliance obligations.

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