Tag Archives: FACTA

Health Care Providers Potentially Exempt from Red Flags Rule

Posted on June 17, 2010 by Hunton & Williams LLP

As reported in BNA’s Privacy Law Watch, the Federal Trade Commission intends to agree to temporarily exempt health care providers from the FTC’s Identity Theft Red Flags Rule.  The Red Flags Rule implements Sections 114 and 315 of the Fair and Accurate Credit Transactions Act.  In relevant part, the Rule requires creditors and financial institutions that offer or maintain certain accounts to implement an identity theft prevention program.  The FTC previously has stated that health care providers could be deemed “creditors” under the Rule.  The agreement will grant relief to health care providers until the resolution of litigation pending before the U.S. District Court for the District of Columbia, in which the American Medical Association and other health groups have asked the court to prevent the FTC from applying the rule to physicians.  As we reported in our previous blog post, the FTC has delayed enforcement of the Red Flags Rule until December 31, 2010, to allow Congress to take action to clarify the Rule’s scope.

Tags: Consumer Protection, Enforcement, FACTA, FCRA, Federal Trade Commission, Health Privacy, Identity Theft, Red Flags Rule, U.S. Federal Law

FTC Set to Appeal the Red Flags Rule Exemption for Attorneys and Law Firms

Posted on March 1, 2010 by Hunton & Williams LLP

On February 25, 2010, the Federal Trade Commission filed a notice that it is appealing the D.C. District Court’s December 28, 2009 judgment in favor of the American Bar Association in American Bar Association v. FTC.  The District Court’s summary judgment held that the FTC’s Identity Theft Red Flags Rule (“Red Flags Rule” or the “Rule”) does not apply to attorneys or law firms.  The Rule implements Sections 114 and 315 of the Fair and Accurate Credit Transactions Act.  In relevant part, the Rule requires creditors and financial institutions that offer or maintain certain accounts to implement an identity theft prevention program.  The program must be designed to detect, prevent and mitigate the risk of identity theft.  Prior to the district court’s decision, the FTC had taken the position in publications and numerous panels that attorneys and law firms meet the Rule’s definition of “creditor” because they allow clients to pay for legal services after the services are rendered.

To read more about the Red Flags Rule, please see our previous blog posts. 

View the FTC’s notice of appeal.

Tags: American Bar Association, Enforcement, FACTA, FCRA, Federal Trade Commission, Financial Privacy, Identity Theft, Red Flags Rule, U.S. Federal Law

Court Finds that Lawyers Are Not Subject to the FTC’s Identity Theft Red Flags Rule

Posted on October 29, 2009 by Hunton & Williams LLP

It is being reported that the U.S. District Court for the District of Columbia agreed this morning with the American Bar Association’s argument that the FTC’s Identity Theft Red Flags Rule ("Red Flags Rule" or the "Rule") does not apply to lawyers.  The Rule implements Section 114 and 315 of the Fair and Accurate Credit Transactions Act (the "FACT Act").  In relevant part, the Rule requires creditors and financial institutions that offer or maintain certain accounts to implement an identity theft prevention program.  The program must be designed to detect, prevent, and mitigate the risk of identity theft. The FTC has interpreted the definition of "creditor" broadly.  The Commission has taken the position in publications and numerous panels that lawyers and law firms meet the definition of creditor because they allow clients to pay for legal services after the services are rendered.  For law firms (as well as for other entities that the FTC deems subject to its enforcement jurisdiction), November 1, 2009 is the deadline for compliance with the provisions of the Rule that require implementation of an identity theft prevention program.

Continue reading…

Tags: American Bar Association, Congress, District of Columbia, Enforcement, FACTA, FCRA, Federal Trade Commission, Financial Privacy, Identity Theft, Information Security, Red Flags Rule, U.S. Federal Law

FTC Extends Red Flags Compliance Deadline to November 1

Posted on July 30, 2009 by Hunton & Williams LLP

On July 29, 2009, the Federal Trade Commission ("FTC") announced another three-month delay in the enforcement of the provision of Identity Theft Red Flags and Address Discrepancies Rule (the "Rule") that requires creditors and financial institutions to implement an Identity Theft Prevention Program.  The FTC noted that small businesses and entities with a low risk of identity theft remain uncertain about their obligations under the Rule and pledged to "redouble" its efforts to educate businesses about compliance with the Rule.  The new enforcement deadline for creditors and financial institutions is November 1, 2009.  The FTC news release is available here.

Tags: Compliance, Enforcement, FACTA, FCRA, Federal Trade Commission, Financial Privacy, Identity Theft, Information Security, Red Flags Rule, U.S. Federal Law

Agencies Issue Final Rules on Credit Report Accuracy under FACTA

Posted on July 16, 2009 by Hunton & Williams LLP

The Federal Trade Commission (“FTC”) recently issued new rules and guidelines to promote the accuracy of consumer information included in credit reports.  The final rules and guidelines were issued in conjunction with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision (the “Agencies”) pursuant to Section 312 of the Fair and Accurate Transactions Act of 2003 (“FACTA”).  The Agencies’ release regarding the new rules, entitled “Procedures to Enhance the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies Under Section 312 of the Fair and Accurate Credit Transactions Act” and “Guidelines for Furnishers of Information to Consumer Reporting Agencies,” was issued on July 1, 2009.  The final rules and guidelines will take effect on July 1, 2010. 

Continue reading…

Tags: Consumer Protection, FACTA, FCRA, Federal Trade Commission, Financial Privacy, U.S. Federal Law

Obama Proposes New Agency to Regulate Consumer Financial Privacy

Posted on July 2, 2009 by Hunton & Williams LLP

On June 30, 2009, the Obama Administration sent legislation to Congress that would create a new Consumer Financial Protection Agency ("CFPA").  Working with state regulators, the new agency would assume authority for the privacy provisions of the Gramm-Leach-Bliley Act, and would have the power to write rules and impose penalties pursuant to a variety of existing statutes, including the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act.  To date, these powers have been shared among all financial services regulators, including the Federal Trade Commission ("FTC").  Under the proposal, the FTC would retain primary responsibility for preventing fraud and encouraging security in the financial markets. 

While some regulatory authority for financial products and services protections would flow from the FTC to the CFPA, the FTC would have increased powers to issue rules related to unfair and deceptive practices, and an enhanced ability to issue civil monetary penalties.  The proposal also includes expanded FTC authority over the banking sector with respect to data security.  While the legislation proposes transferring staff from certain financial services regulators, there would be no transfer of staff from the FTC.  Accordingly, the FTC may have more resources to pursue other consumer protection issues, including privacy in non-financial markets.

The Administration’s full report on its financial reform plan can be viewed here.

Tags: Congress, Consumer Protection, Enforcement, FACTA, FCRA, Federal Trade Commission, Financial Privacy, Gramm Leach Bliley Act, Obama

FTC Delays Enforcement of the Red Flags Rule until August 1, 2009

Posted on May 1, 2009 by Hunton & Williams LLP

At the eleventh hour, the Federal Trade Commission announced that it will once again delay enforcement of the Red Flags Rule.  The Red Flags Rule was promulgated pursuant to the Fair and Accurate Credit Transactions Act of 2003 ("FACTA").  The previous compliance date was May 1, 2009, which was an extension from the original deadline of November 1, 2008.  The new extension applies only to the provisions of the Rule requiring financial institutions and creditors to implement an identity theft prevention program.  The continuing enforcement delays respond to ongoing uncertainty about the Rule’s intended scope.  In announcing this latest delay, the FTC cited "the ongoing debate about whether Congress wrote this provision [of FACTA] too broadly" and stated that extending the compliance deadline would "allow industries and associations to share guidance with their members . . . and give Congress time to consider the issue further."  On March 20, 2009, the FTC published the Red Flags Rule Compliance Guide to assist organizations that must comply with the Red Flags Rule.  The FTC stated in its news release yesterday that it will attempt to address some of the concerns regarding compliance with the Rule by publishing an identity theft prevention program template for low risk entities.  The FTC’s news release is available here.

Tags: Compliance, FACTA, FCRA, Federal Trade Commission, Identity Theft, Information Security, Red Flags Rule, U.S. Federal Law