FTC Red Flags Rule
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Recent News
House Passes HR 3763, Exempting Dentists and Other Small Businesses from the FTC's Red Flags Rule
The House of Representatives Tuesday night overwhelmingly passed H.R. 3763, a bill introduced by Reps. John Adler (D-N.J.), Mike Simpson (R-Idaho) and Paul Broun (R-Ga.) that would exempt small businesses, including private practicing dentists, from having to comply with the Federal Trade Commission's 'Red Flags Rule.'
The Federal Trade Commission (FTC) has issued another 90-day delay in the enforcement of its Red Flags Rule, which would have gone into effect Aug. 1. The FTC announced  the delay, until Nov. 1, 2009.
The rule requires financial institutions and creditors to develop written plans to prevent and detect identity theft. The FTC deemed dentists and physicians as creditors who are subject to the rule when they do not 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.
During this delay, the ADA has been working to pass newly introduced legislation, HR 3763, that would exempt dentists, other small health care providers and other select small business entities from having to comply with the Red Flags Rule. Rep. John Adler (D-NJ), along with Reps. Mike Simpson (R-Idaho) and Paul Broun (R-GA), have been working with the FTC on this bill language for the past two months to gain full consensus. The ADA is grateful for their leadership on this issue.
The leadership of the U.S. House of Representatives has tentatively scheduled a vote on the House floor for HR 3763 on October 20. If passed, the ADA will try to bring a similar bill to the Senate floor soon thereafter.
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At Issue
On November 9, 2007, the Federal Trade Commission (FTC) issued a final regulation implementing the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which requires financial institutions and creditors to develop and implement a written identity theft program (Red Flags Program). Neither the FACT Act nor the final rule issued by the FTC specifically mentions dentists or other health care professionals as creditors.
Nonetheless, the FTC has determined that dentists and other health care professionals should now be covered under this law and, therefore, must implement a Red Flags program.
The American Dental Association is working to exempt dentists from this rule.
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Contact Us
For additional information, please contact:
Government Affairs
1111 14th Street NW, Suite 1100
Washington, DC 20005
202-898-2400
Fax: 202-898-2437
E-mail: govtpol@ada.org
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