Bill Exempts Doctors from FTC's Red Flag Rule on ID Theft
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:
- Obtains or uses consumer reports, directly or indirectly, in connection with a credit transaction
- Furnishes information to consumer reporting agencies in connection with a credit transaction
- Advances funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person
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:
- A creditor is any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit.
- Accepting credit cards as a form of payment does not in and of itself make an entity a creditor. Creditors include finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies.
The bill may be viewed here.
Dom Nicastro is a contributing writer. He edits the Medical Records Briefings newsletter and manages the HIPAA Update Blog.
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