FTC Red Flags Rule Suspended

My office put together a RED FLAG Rule program and it really was not a big deal. MJ

Dear Colleagues,

I am very pleased to inform you that the Federal Trade Commission has issued a 90-day delay in the enforcement of its Red Flags Rule, which would have gone into effect May 1. This delay will give the ADA more time to challenge its applicability to small health care providers such as dentists.

The ADA's vigorous efforts to reverse the FTC's regulation, coupled with the nearly 11,000 e-mails you sent to Congress, have had the desired effect. We are grateful to Congressman Mike Simpson (R-Idaho) and House Small Business Chair Rep. Nydia Velazquez (D-N.Y.), both of whom wrote to the FTC in support of our position.

The rule would require financial institutions and creditors to develop written plans to prevent and detect identity theft. FTC originally deemed dentists and physicians as creditors who are subject to the rule when they don't 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, and our friends in Congress agree.

Rep. Simpson and nine other dentist and physician House members signed a letter to FTC Chairman Jon Leibowitz asserting that the agency's interpretation of the authorizing law "goes beyond the intent of Congress and has failed to consider the financial burden this decision will have on dental and medical practices and those of other health care providers across the country."

Rep. Velazquez also wrote to the FTC saying that the agency "has failed to meet the requirements" of the Regulatory Flexibility Act, which requires agencies to assure that small business entities are given an opportunity to participate in making rules that have a significant economic impact on them.

The FTC announced the delay in the rule's enforcement on FTC.gov.

I wish to thank all of you who have helped with this effort. We will keep you apprised of developments.


John S. Findley, D.D.S.


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