Saturday, February 27, 2010

Will the Red Flag Rules Rise Again for Law Firms?

As noted by the Blog of the Legal Times, and expected when a judge first put enforcement on hold for law firms last October, the FTC has filed an appeal, arguing that it does in fact have the authority to apply Red Flag Rules to law firms.

Red Flag Rules aim to protect personal information held by creditors and would put new confidentiality enforcement, tracking and compliance requirements on law firms.

The argument presently hinges on the definition of "creditor." The FTC argues that law firms qualify. The ABA argues that the legislation creating the Red Flag mandate never intended it to apply to law firms and the FTC is exceeding its reach. In October, a judge sided with the ABA. But this issue is far from settled...

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