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BASF Sends Letter to Federal Trade Commission in regards to Lawyer Exemption for Red Flags Rule
July 20, 2009 -- San Francisco-- The Bar Association of San Francisco President Russell Roeca sent a letter on behalf of BASF members to the Federal Trade Commission on July 17, requesting the FTC exempts lawyers from the Red Flag Rule – Fair and Accurate Credit Transactions Act (FACTA).
The rule requires certain creditors to develop and implement written programs to identify, detect and respond to the warning signs of identity theft. It is the FTC’s plan to apply this rule to lawyers and law firms even though lawyers are not engaged in the type of commercial activity that Congress is trying to regulate.
Roeca gave the following reasons in requesting the exemption:
- FACTA was not intended to cover lawyers and does not require the FTC to cover lawyers under the Red Flags Rule.
- The manner in which lawyers bill is not an extension of credit.
- Failure to apply the Red Flags Rule to lawyers would not increase the risk of identity theft.
Read a copy of the letter sent by BASF. (181KB PDF)
Read a copy of the response (81KBPDF) received on August 6, 2009 from the FTC.
August 27, 2009 Update: Federal Trade Commission's “Red Flags Rule” Leads American Bar
Association To File Suit: Rule Burdens Lawyers with No Client Benefit and Invades State Regulation of Lawyers
Read the ABA Press Release
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