The District Court for the District of Columbia ruled recently
that the Federal Trade Commission's so-called "Red Flags Rule"
cannot be applied to lawyers. The Massachusetts Bar Association was
actively opposed to the application of the Red Flags Rule to
attorneys and voiced its concerns to the FTC.
The MBA, working with the American Bar Association, also
communicated its concerns to members of Congress. Ultimately, the
ABA filed suit in August following months of work seeking
clarification of the rule and its application to lawyers. On Oct.
30, Judge Reggie Walton ruled from the bench.
The Red Flags Rule was promulgated by the FTC under the Fair and
Accurate Credit Transaction Act (FACTA Act) of 2003. The Red Flags
Rule requires certain creditors to develop and implement programs
to identify, detect and respond to warning signs of identity theft.
The FTC had indicated plans to apply the rule to lawyers, despite
the fact that they are not creditors.
Also on Oct. 30, the FTC extended the enforcement deadline to
June 1, 2010.