New Law Clarifies Who is Subject to the Red Flags Rule
INDUSTRY NEWS TAGS: Other Healthcare News
On December 18, 2010, the President signed into law the "Red Flag Program Clarification Act of 2010," which clarifies the type of "creditor" that must comply with the Red Flags Rule. The AMA is pleased that this law supports AMA’s long-standing argument to the Federal Trade Commission (FTC) that the Red Flags Rule should not be applied to physicians generally.
The new law indicates that creditors that fall under the Red Flags Rule are only those who regularly and in the ordinary course of business: (1) obtain or use consumer reports, directly or indirectly, in connection with a credit transaction; (2) furnish information to certain consumer reporting agencies in connection with a credit transaction; or (3) advance funds to or on behalf of a person, based on the person’s obligation to repay the funds or on repayment from specific property pledged by them or on their behalf (this does not include creditors who advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person). Creditors that fall under one of the above-mentioned categories must comply with the Red Flags Rule by December 31, 2010. Creditors that do not fall under one of these categories are not subject to the Red Flags Rule.