government relations help desk

Beware Federal Regs: Red Flag & Product Safety

In Links, Rules&Regs on October 12, 2009 at 9:50 pm

You’ll need to pay attention to a couple of obscure, new Federal Regulations: The FTC’s Red Flag Rule & the CPSC’s Product Safety Bans on Used Kids’ Stuff.

From the bowels of bureaucracy, the unelected faceless folks that made rules that impact our daily lives, come these efforts to curb identity theft and save children from the harms of toys once recalled but recycled below the retail radar. From the Federal Trade Commission comes the Red Flags Rule, with more in the way of clear guidance to come before they begin enforcement this November 1st. Businesses that extend credit to individuals will be expected to have a written policy in place to detect suspicious activity that could evidence or lead to identity theft. Neither one-off, nor business customer transactions are covered in the scope, but ongoing billable relationships with sole proprietors appear for the moment to require particular scrutiny — as guidance is released, I will share a model policy handbook to handle dealings with contractors and doing-business-as type accounts.

As for the Consumer Product Safety Commission and the “Improvement Act” of the same name, there are new guidelines and ongoing rulemaking process. It is illegal for anyone — from thrift stores to your neighbor by way of yard sale — to sell merchandise recalled from the retail market. And there’s a bigger budget for enforcement, especially for children’s toys, clothing and cribs. Publishers seem to be off the hook for penalties, but it might be good to suggest some warnings for ad copy on choking hazards of small toys. Otherwise, here’s the link to the Official Handbook to point clients to for their own protection.

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