The FTC has just delayed enforcement of the Red Flags Rule again, this time from June 1, 2010 through December 31, 2010. I wanted to alert you promptly to this important update since the previously scheduled enforcement date was to begin tomorrow (Tuesday). We will write a story about this development for Insurance News & Views on Thursday, and update our memo that covers the Rule in the Legal Advocacy section of www.independentagent.com so we can direct members seeking additional information to that resource.
This enforcement delay follows the FTC's appeal of the decision it lost last year to the American Bar Association, which filed a lawsuit in August 2009 challenging the agency's expansive definition of "creditors" as including lawyers under the identity theft regulations. A similar lawsuit over the Rule was filed last November against the FTC by the American Institute of Certified Public Accountants and has not yet been decided. And, another lawsuit was filed late last month against the FTC by the American Medical Association, American Osteopathic Association, and the Medical Society for the District of Columbia, asserting that the Rule exceeds the FTC's authority and is arbitrary.
According to the FTC press release announcing the latest enforcement delay, it is at the request of several Members of Congress. The press release also stated that "The Commission urges Congress to act quickly to pass legislation that will resolve any questions as to which entities are covered by the Rule and obviate the need for further enforcement delays. If Congress passes legislation limiting the scope of the Red Flags Rule with an effective date earlier than December 31, 2010, the Commission will begin enforcement as of that effective date."
