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‘Red flags’ case ends in D.C. court
By: DOLAN MEDIA NEWSWIRES//March 11, 2011//
Listen to this articleWashington (Dolan) — The D.C. Circuit has dismissed the American Bar Association’s case against the Federal Trade Commission over the application of the agency’s “red flags” rule, ending a long-running legal saga.
The court held that the passage of the Red Flag Program Clarification Act, which exempts attorneys from the rule, rendered the case moot.
The rule requires businesses that accept deferred payments from clients to create written policies outlining how they will prevent, detect and address identity fraud. The FTC had appealed a summary judgment in district court in favor of the ABA. The decision held that the rule did not apply to attorneys.
Before the D.C. Circuit could rule, Congress passed a law exempting lawyers and other professionals from enforcement.
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