The Red Flags Rule, which was released Nov. 9, 2007, under the Fair and Accurate Credit Transactions Act of 2003, requires businesses and organizations within its scope to implement a written identity theft prevention program to detect warning signs of identity theft in their day-to-day operations. Enforcement of the rule has been postponed numerous times—most recently until Dec. 31, 2010—since the original Nov. 1, 2008, effective date.
The rule applies to what it calls “financial institutions” and “creditors.” However, according to the FTC website, the definition of “creditor” in the rule is broad, and includes businesses or organizations that regularly provide goods or services first and allow customers to pay later. As examples, the FTC says utilities, health care providers, lawyers, accountants, and other professionals, and telecommunications companies may fall within the definition.
The Social Security Administration issued a final rule that limits beneficiaries’ ability to stop their Social Security retirement payments, repay their cumulative past benefits, and start receiving higher payments available to older applicants. The SSA said the restrictions were necessary to prevent abuse of the option, which has been called the “do-over” (see “Social Security for Two,” JofA, Jan. 2009, page 30) and to protect the solvency of the Social Security Trust Fund.
Effective Dec. 8, 2010, the date of the final rule (RIN 0960-AH07, docket no. SSA 2009-0073), recipients of retirement benefits may cancel them only once during their lifetimes and only within the first 12 months after they begin receiving benefits. The rule also specifies that recipients who previously could obtain the same result by suspending their benefits retroactively now may make such suspensions only prospectively.
Primary beneficiaries may start receiving benefits as young as age 62, but at only 75% of benefits available to them at full retirement age (66, for applicants born between 1943 and 1954). The percentage increases to 100% as applicants approach full retirement age. They may also delay applying past full retirement age up to age 70 and receive still higher benefits. Although the Social Security Act does not explicitly permit it, a “longstanding policy” has allowed retirees to stop their benefits, repay them—without interest—and resume them at a higher amount.
“Recent media articles have promoted the use of our application withdrawal process as a means for retired beneficiaries to increase their benefits or acquire an ‘interest-free loan,’ ” the SSA said in describing the amended rules (Fed. Reg. 75:235, page 76257, Dec. 8, 2010). The SSA said its field offices reported that such withdrawals had increased in recent years. Other reasons recipients sometimes stop their benefits include continuing to work after they had planned to retire and thereby exceeding an annual earnings limit.
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