Last month, the FTC delayed the implementation of the Red Flags Rule compliance for a fifth time this month. The delay was brought on by a lawsuit filed by the American Medical Association, American Osteopathic Association, and the Medical Society of the District of Columbia. The lawsuit claims physicians do not require or collect immediate payment for their services and therefore cannot be seen as a creditor.
The Red Flags Rule is designed to help prevent id theft from occurring and protecting business owners from unnecessary losses by mandating id verification and id authentication of individuals with whom companies due business. The Red Flags Rule subjects all organizations who have a creditor relationship with the public to meet Red Flags Rule compliance.
A similar lawsuit brought about by the American Bar Association led to the Red Flags Rule extended in November 2009.