LOS ANGELES, CA - Responding to rising incidents of identity fraud, the Federal Trade Commission (FTC) is requiring all businesses that extend credit to customers, beginning June 1, to develop written plans to prevent identity theft, the Los Angeles Times reports.

"Once the information is in the hands of identity thieves, there's not much more the consumer can do," said Naomi Lefkovitz, senior attorney for the FTC. "Now it's in the hands of the businesses."

The new rule will affect banks as well as companies that provide services first and charge for fees later, for example, a doctor who bills patients after procedures are performed.

To comply with the regulation, a business must develop a written plan for identifying signs of identity theft, as well as steps that it would take to prevent it.

The FTC offers recommended steps for developing the plan, as well as indications of identity theft, which vary according to the business. These indicators include customers who attempt to pay with a credit card and offer a driver's license or other piece of identification that appears fraudulent, or a credit report with dramatic changes in credit numbers.

The plans do not need to be submitted to the FTC, though they are subject to government review if a business experiences repeated instances of identity theft. Companies that lack written plans could be sued by the agency or subject to $3,500 for each violation.

The law was passed in 2008 but has not been enforced because of confusion over plan development and filing requirements, Lefkovitz said.