Tuesday, November 24, 2009

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.

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