Officials with the American Bar Association are hailing U.S. Senate action to exempt lawyers from the so-called “Red Flags” rules designed to combat credit fraud.
According to a statement by Sen. Chris Dodd, D-Conn., a bill approved by the Senate makes it clear that the law will not apply to lawyers, doctors, dentists, accountants and other heath care and service providers merely because they wait for full payment in many cases. There is no opposition to the clarification measure in the House of Representatives, according to an ABA lobbyist.
“Last night’s Senate vote to clarify the rule so that lawyers are clearly not included was a critical step in ending a bureaucratic effort to solve a non-existent problem with paper-pushing regulations that would have increased legal costs,” said ABA president Stephen N. Zack in a statement.
The “red flags” rules require businesses that accept deferred payments from clients to create written policies to prevent, detect and address identity fraud.
The rule originally became effective on Jan. 1, 2008, but the Commission has delayed enforcement several times amid challenges to the rule’s applicability and related legislation.
By Peter Vieth