Trials & Litigation
After ABA Wins ‘Red Flags’ Suit Over ID Theft Rules, Accountants Sue, Too
Posted Nov 12, 2009 1:55 PM CST
By Martha Neil
After apparently taking note of an American Bar Association win last month in a federal case contending that the Federal Trade Commission exceeded its authority by applying the so-called Red Flags Rule to lawyers, a trade association for accountants has filed a similar suit.
Just like lawyers, accountants also send clients monthly bills. But that doesn't mean that they are "creditors" as defined by the FTC and thus required to take measures to safeguard customers from possible identity theft under the Fair and Accurate Credit Transactions Act, argues the American Institute of Certified Public Accountants in a federal lawsuit filed yesterday in the District of Columbia.
“We feel that we should be treated the same as the lawyers, and we had hoped that the FTC would agree to that,” AICPA General Counsel Richard Miller tells the Blog of Legal Times. “But in view of the fact that they did not, we felt the need to file the lawsuit.”
The AICPA is represented in the litigation by Fried Frank Harris Shriver & Jacobson.
As detailed in an earlier ABAJournal.com post, U.S. District Judge Reggie Walton ruled from the bench Oct. 29 in a District of Columbia case filed by the ABA that the FTC had wrongly determined lawyers to be creditors. Hence, since lawyers are not creditors, they are not required to comply with the anti-identity theft provisions of the FACTA statute applicable to creditors.
Enforcement of the Red Flags Rule has now been delayed by the FTC until June 1, 2010.
ABA Journal: "Taking Aim at Red Flags"