June 10, 2010
Last week, the Federal Trade Commission (FTC) announced that it will further delay enforcement of its Red Flags Rule, which would have gone into effect on June 1, 2010. With the new extension, enforcement is postponed until Jan. 1, 2011.
The Red Flags Rule requires financial institutions and creditors to develop written plans to prevent and detect identity theft. The FTC has interpreted the rule to apply to dentists and physicians as creditors when they don’t receive payment in full from their patients at the time of treatment. The ADA believes that characterizing dentists as “creditors” in this context is incorrect and has pursued legislation to correct the misapplication of the rule.
U.S. Senators John Thune (R-S.D.) and Mark Begich (D-Alaska) introduced SB 3416 last week. The bill would exempt various small businesses, including dental practices, from the Red Flags Rule. The senate bill is identical to a bill that passed in the House unanimously in October. The enforcement delay is intended to give Congress time to pass this legislation to permanently exclude certain small businesses, including dental practices, from the Red Flags Rule.