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ABA Takes on the FTC

By Carolyn Elefant

Earlier this month, the Federal Trade Commission once again delayed enforcement of its "Red Flags Rule," which requires creditors and financial institutions more time to develop and implement written identity theft prevention programs. As discussed here, the FTC considers lawyers to be creditors and therefore subject to the red flag rules because they extend credit to clients by rendering services first and issuing fees after the work is completed. The ABA opposes the FTC's rules but has attempted to resolve the matter amicably. Now, tired of playing wait and see, the ABA yesterday filed suit against the FTC in federal district court in the District of Columbia, asking the court to enjoin the FTC from applying the Red Flags Rule to lawyers, reports The National Law Journal and The Am Law Daily. As summarized by the NLJ, the ABA Complaint contends that: applying the rule to lawyers is ?arbitrary, capricious and contrary to law,? and that the FTC has failed to ?articulate, among other things: a rational connection between the practice of law and identity theft; an explanation of how the manner in which lawyers bill their clients can be considered an extension of credit under the [Fair and Accurate...

Full post as published by Legal Blog Watch on August 28, 2009 (boomark / email).