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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…

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

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…

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 Agencies Issue Final Rules on Credit Report Accuracy under FACTA

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…

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…