FTC Delays Identity Theft Rule Yet Again

coondoggie sends news that the FTC, at the request of several members of Congress, has delayed enforcement of anti-ID-theft rules — for the fourth time since the original implementation date, November 2008. "The [Red Flags] rule requires financial institutions and other creditors to develop and carry out identity-theft prevention programs. ... The problem with the rule revolves around which entities must comply and develop identity-theft prevention programs. ... 'It's the act of delaying payment for services that can sweep in entities you wouldn't normally think of as creditors,' Kuehn said. Already, the American Bar Association, the American Medical Association, and the American Institute of Certified Public Accountants have sued, saying that the Red Flags Rule shouldn't apply to their members."

AMA objections.

[TheMeuge]

The reason for the objection by the AMA is that this rule would designate doctors as creditors, by virtue of them billing for their services. This would require a torrent of new paperwork to be handled by the doctors' offices. Ultimately, the time and staff cost of compliance would be extremely high, while there aren't likely to be any benefits in terms of reduction of personal data theft from medical practices, since HIPAA regulations are already very strict regarding personal information.

Since many hospitals and practices already operate on rather thin margins (3% is considered excellent for a hospital), the last thing medical institutions need is more staff to handle paperwork. They already outnumber doctors...

Re:ok...

[Qzukk]

do they not have important data that could be used in an identity theft?

The "Red Flags Rule" isn't about stealing data, it's about requiring people to watch for signs that stolen data is being used (hence "Red Flags"). Things like fake IDs, addresses that don't match your records or are not valid, or a SSN that isn't in the date range for the person's DOB.

Re:Just Make it Their Problem

[anegg]

BINGO! Just Make It Their Problem! I like the sound of it. Nice and simple. It is exactly what should happen. If a bank extends credit to someone claiming to be me, then bills me for it, it should be the bank's problem to PROVE it was me, not mine to prove it wasn't. There should also be a penalty for those people who falsely claim it wasn't them when it was. I suspect the whole "stolen identity" thing will largely die off when the banks have to eat the results of their bad decisions. There will probably also be an impact on the availability of credit, but I'm not convinced that will be a bad thing.

Re:Businesses Like Identity Theft

[Anonymous Coward]

It is good for the credit card's bottom line, but not the merchants.

When the customer complains the credit card takes the funds back from the merchant and charges them a charge back fee on top of losing the merchandise. Ultimately the customer walks away, the credit card makes a fee, and the merchant is left holding the bag.