CPA’s, Identity Theft, and the Law

By: Sue B Martines J.D.

The attorneys may have gotten off the hook for the Red Flags Rule requirements, but so far, not the CPA’s, among other “professionals” (such as physicians). Picture this – two so-called “professionals,” one an attorney and one a CPA, discuss identity theft and the Red Flags Rule implemented by the FTC to help businesses develop “Red Flag” indicators for fraud – the conversation might go something like this:

Attorney, “being a busy professional, I sure am grateful to not have another burdensome requirement made of me by the government!”

CPA, “being a busy professional, I sure am grateful for the opportunity to have guidance on how to better guard against the time-consuming, professionally-damaging and high client impact of an identity theft or data breach!”

Two different professionals, two different treatments so far, by the law!

In a previous posting, we discussed the recent court decision finding attorneys exempt from the “burdensome” requirements of the Red Flags Rule; here we make the somewhat absurd double-standard comparison, you might say, to one of their counterparts -- CPA’s.

We all know there’s no immunity from identity theft risk. The American Institute of CPA’s itself fell prey to the #1 risk factor – human error – when in 2006 a damaged hard drive containing personal information was sent out for repair and was lost in transport. (http://www.pro2net.com/x52999.xml)

However, in an IRS online publication regarding CPA’s and identity theft, you will find zero things unique to the CPA that wouldn’t equally apply to an attorney! (http://www.irs.gov/pub/irs-utl/identity_theft_what_cpas_need_to_know.pdf)

Certainly the fight may not be over for CPA’s, or other “busy professionals” whose attorneys will challenge the Red Flags Rule “requirements” to have an identity theft prevention and mitigation plan in place by June 1, 2010.

Yet, if only all CPA’s could look at identity theft and data protection measures like the one in the discussion above – it could mean less lawsuits for the “burdened” attorneys, and better protection of client data!

Maybe the requirements of the law aren’t that bad of an idea after all!

Sue B Martines is a recovering attorney of 12 years now living in Oregon. Sue can be reached at, suebmartines@gmail.com

Swift Reaction is the Key to Intruding on Identity Thieves

by Stacy Whelchel

After you receive an official letter or an email letting you know that your personal information has been breached, the worst is over, right?

Not necessarily so, according to this MSN story.

It depends on if the victim actually reads the letter and takes action to prevent recurrence. This doesn’t always happen because the correspondence is sometimes considered junk mail and discarded unopened, according to the report.

Researchers determined that about one in nine consumers receive a security breech notification letter each year. To make matters seemingly worse, these victims have a one in five chance of being duped again during the next year, states the survey by a research firm. Just think what can happen if the initial letter, or subsequent correspondence, are ignored.

Identity theft is a serious crime stopped by awareness before, during, and after the crime. If a security breech notification letter is received, it’s in your best interest to read all the information and call the source if there are questions about any details or recommendations. It might also be in your best interest to consult an attorney to protect your legal rights.

Time is crucial after an intrusion by an identity thief; don’t give them more chances to do the crime by ignoring all the corresponding warning signs.

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Stacy Whelchel is a Corporate Writer at Pre-Paid Legal Services, Inc. Pre-Paid Legal's signature products, including the Life Events Legal Plan and Identity Theft Shield, serve more than 1.5 million families in North America.

Red Flags Extension, Trends in ID Theft and Attorneys as “above” the law?

By Sue B. Martines J.D.

Any time there is an “exception to the rule,” as the saying goes, it feels like someone is getting off the hook.  And truth be told, most would say attorneys get off the hook all too often.   So here it comes again, with the latest argued exception to the thrice-postponed Red Flags Rule – attorneys shouldn’t have to create written policies outlining how they will prevent, detect and respond to identity fraud.

My, what a burden that might be for them!

But most laws are somewhat burdensome – especially when they’re first mandated and folks are figuring out how to comply.  So it comes as no surprise that the same has been true with businesses scrambling to determine if they are a “creditor” and thus, subject to the identity verification requirements of the “Red Flags Rule.” * The Federal Trade Commission (FTC), tasked with imposing the Rule designed to slow identity theft, lost its most recent battle defending the applicability of the Red Flags to attorneys.

In a  The Daily Record online posting, the FTC argues that as attorneys accept payments from their clients so they ought  be subject to the “creditor” requirements of the Red Flags Rule.  But this U.S. District Court for the District of Columbia sided with the American Bar Association, saying…what was it?  Ah yes, that that would be too “burdensome” on those hard-working attorneys!

Stay-tuned as the courts test the burden-ability of various acclaimed creditors between now and June 1, 2010 (the new deadline)!  And as The Record notes, the FTC can appeal the ruling.

Sue B Martines is a recovering attorney of 12 years now living in Oregon.

Identity Theft’s Youngest Victims: Children and Teens

By Aleshia Altizer

Applying for that first credit card or opening that first checking account should be an exciting step for teens. But for some, this could be the moment when they discover that they’ve been victimized by identity theft. Children are susceptible because it is often years before they attempt to apply for credit, leaving the thief plenty of time to abuse their credit and vanish. A story posted on MSN Money earlier this year gives us a sobering look at the impact of identity theft to our children.

A 17 year old from California went in to open a checking and savings account at the bank only to discover his Social Security Number was under someone else’s name. The young man’s identity had been stolen years before when he was only 12. Now, as a college graduate he has been “financially crippled” by the bad credit the thief left behind.

The article also quotes former New York Sen. Hillary Rodham Clinton who made the following remarks in a statement: “Identity theft and the theft of our personal information is out of control,” Clinton wrote. “No one is safe, not even kids and young adults, as identity thieves carry out electronic muggings that can cost people cash and their credit records.”

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Aleshia Altizer is a Corporate Writer at Pre-Paid Legal Services, Inc. Pre-Paid Legal's signature products, including the Life Events Legal Plan and Identity Theft Shield, serve more than 1.5 million families in North America.