FTC again delays enforcement of Red Flags Rule

The Federal Trade Commission has delayed until 2011 the enforcement of a rule that requires companies, including veterinary practices, to develop programs to prevent identity theft.

The FTC published the Red Flags Rule in 2007 to implement the provisions of the Fair and Accurate Credit Transactions Act that require financial institutions and creditors to create programs to detect warning signs of identity theft—red flags—and respond appropriately. The agency has delayed enforcement of the rule multiple times, however, at the request of businesses and legislators.

According to an earlier FTC press release, creditors include professionals such as health care providers "who bill their clients after services are rendered."

In 2009, the House of Representatives passed a bill (H.R. 3763) to exempt certain businesses with 20 or fewer employees, including health care practices such as veterinary practices, from the Red Flags Rule. The Senate Committee on Banking, Housing, and Urban Affairs is considering a companion bill (S. 3416).

The AVMA has been lobbying the FTC and Congress to exempt veterinary practices from the Red Flags Rule. The Association also has compiled resources regarding the rule, including a guide to compliance for veterinary practices here.