The FTC "broadly interpreted" creditors to include any business that allows clients to establish a payment plan in exchange for their services rendered, said Rep Paul Broun, R-GA. This swept in "many businesses that do not operate as a creditor in the general understanding of the term, such as dentists, doctors, veterinarians, lawyers, accountants, and many other health care providers that offer their clients payment plans."
Added Adler: "It is clear when Congress wrote the law, they never contemplated including these types of businesses within the broad scope of that law. ... We need to be careful that the laws we pass address the problem and do so in a way that doesn't adversely and unfairly impact small businesses."
This week's Clarification Act includes the following language regarding the definition of a creditor as one that regularly and in the ordinary course of business:
Creditors do not include those that advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person
The current language in the FTC's Red Flags Rule regarding the definition of a creditor includes:
The bill may be viewed here.