The Red Flags Rule enforcement by the Federal Trade Commission which will require financial institutions to use written policies for detecting and preventing identity theft has been delayed until January of 2011.
Originally slated for June 1 of this year, the delay in enforcement is the result of multiple requests to place certain limitations on the Red Flags rule. Under the current Red Flags Rule financial institutions both online and offline which provide consumer credit must develop company policies for identity theft protection. The FTC hopes that Congress will speed the process of legislation to enable enforcement of the Red Flags Rule.
Legislation has been delayed as the result of requests by the American Medical Association, the American Osteopathic Association, and the Medical Society of the District of Columbia who have petitioned the FTC to exclude physicians from the Red Flags Rule. The FTC refused so the medical organizations filed a lawsuit against the FTC due to laws that are written too broadly which unintentionally cover physicians.
Under the Red Flags Rule, the medical organizations claim that the law is designed for banks and lending institutions and medical professionals are unrelated to this sector. The FTC has argued that the rule should apply equally since medical organizations can extend credit to a patient while waiting for insurance claims to be processed. The Red Flags Rule covers financial institutions, health care providers, telecommunications companies, auto dealers, and mortgage brokers.
Last year the American Bar Association defeated legislation that covered lawyers under the Red Flags Rule. Now the AMA has jumped on the bandwagon and argues that investigation of a patient’s identity will erode the patient-physician relationship and create more paperwork for health care providers.
Unfortunately medical identity theft is on the rise and services like TrustedID cover medical identity theft and will review your medical benefits as part of their protection. In my opinion, the AMA needs to stop thinking the Red Flags Rule doesn’t pertain to them and develop policies to address the fastest growing crime in America.