ABA Sues FTC Over Applying 'Red Flags Rule' to Lawyers

WASHINGTON - The American Bar Association filed suit last week in the U.S. District Court for the District of Columbia against the Federal Trade Commission, seeking an injunction to block the application of the so-called "Red Flags Rule" to practicing lawyers.

The bar association has been lobbying for months to exempt lawyers from the regulations, which require businesses and organizations that act as "creditors" to establish a program for preventing identity theft. According to an FTC guide, the program must identify potential areas of vulnerability within a business and include policies for detecting and responding to red flags.

The FTC has included lawyers, doctors and many other professionals in its definition of "creditors" because they bill customers only after providing services. The bar association disagrees with the interpretation.

New York Law Journal