Update: In a voice vote today, December 7, 2010, the House passed the Red Flag Program Clarification Act of 2010. The Act now goes to President Obama for signing.
On November 30, 2010, the U.S. Senate passed legislation that could exempt health care providers from the FTC’s Red Flag Rule. The Red Flag Program Clarification Act of 2010 amends the Fair Credit Reporting Act with regard to the applicability of identity theft guidelines to creditors. Under the amendment, a “creditor” will “not include a creditor . . . that advances funds on behalf of a person for expenses incidental to a service provided by the creditor to that person.” There is an identical companion bill before the House, which is expected to pass. The Clarification Act may lift an impending compliance burden on businesses that do not collect payment for services at the time services are rendered, where there is no reasonably foreseeable risk of identify theft. Continue reading