The American Dental Association continues to fight the inclusion of dental practices in the implementation of the so-called Red Flags Rule, anti-identity theft policies being established by the Federal Trade Commission. The ADA argues that FTC interpretation of the rules to include dentists’ offices as “creditors” that must comply with the rules will be overly burdensome for small practices.
Created through the Fair and Accurate Credit Act of 2003, the regulations require businesses that extend credit to consumers to develop a written policy that identifies warning signs and suspicious activities (i.e., red flags) of possible identity theft, and tactics to address and prevent it. Businesses that defer payment for goods or services must follow the Red Flags Rule.
Enforcement of the rule has been delayed five times, and is currently set to begin December 31, 2010. Although enforcement of the rule has been delayed, the rule is expected to eventually take effect – once Congress and the court system work through the details.
Businesses falling under the rule must adopt a written policy that identifies warning signs and suspicious activities of possibly identity theft that are relevant to day-to-day business operations as well as outline procedures on how potential identity theft is handled once identified and how new tactics and technology will be used by the business over time to thwart identity theft. Failure to comply with the rules can result in federal penalties as well as civil suits.
Red Flag Rules Help