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FTC again delays enforcement of Red Flags Rule

Washington—The Federal Trade Commission announced May 28 that it has further delayed enforcement of its Red Flags Rule until Jan. 1, 2011. The delay is intended to give Congress time to pass legislation that would permanently exclude certain small businesses, including dental practices, from the rule.

ADA President-Elect Dr. Raymond Gist and ADA Washington Office staff met with FTC Chairman Jon Leibowitz in April to request an extension of the rule and to discuss permanent solutions.

Reps. John Adler (D-N.J.), Mike Simpson (R-Idaho) and Paul Broun (R-Ga.) sent a letter May 27 to Mr. Leibowitz, at the ADA’s request, asking for a delay through Jan. 1, 2011. 

The Red Flags Rule is intended to protect consumers from identity theft, but the ADA and advocates for small businesses and other professions have argued that Congress never meant for the law to cover them.

However, the FTC interpretation of the law exposes dental practices and many small businesses to substantial fines and penalties if they fail to comply with the rule.

The ADA has worked with lawmakers in both the House and Senate to draft legislation that would exempt dentists. This week, Sens. John Thune (R-S.D.) and Mark Begich (D-Alaska) introduced S. 3416, which would exempt various small businesses, including dental practices, from the rule. The Senate bill is identical to a bill that passed the House in October by a 400 to 0 vote.

The complete FTC announcement is available here.