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FTC regulations confirm ODs exempt from Red Flags Rule

February 4, 2013

The Federal Trade Commission (FTC) recently confirmed a 2010 AOA legislative victory when it issued regulations affirming that optometrists are generally not required to comply with the anti-identity theft “Red Flags Rule.”

The FTC action comes more than five years after the agency issued a set of regulations, collectively known as the Red Flags Rule, which required certain entities to develop and implement written identity-theft prevention and detection programs to protect consumers from identity theft.

While aimed at ensuring banks, credit card companies and certain retailers protected consumer financial information, the FTC unfortunately took the position that the Red Flags Rule would apply to optometrists and other health care providers. The AOA strongly opposed the FTC’s position.

After reaching out directly to FTC officials and successfully arguing the new regulations were redundant and burdensome for optometry practices, the FTC issued five separate implementation delays over the ensuing years.

At the same time, the AOA and others working with the White House and leaders in Congress lobbied to develop and approve legislation permanently exempting ODs from Red Flags Rule requirements, resulting in enactment of the AOA-backed Red Flag Program Clarification Act of 2010.

Going forward, the FTC regulations specify that the Red Flags Rule applies only to creditors that regularly conduct one or more of the following activities:

1. Obtain or use consumer reports, directly or indirectly, in connection with a credit transaction; or

2. Furnish information to consumer reporting agencies in connection with a credit transaction; or

3. Advance 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.

The AOA Advocacy Group stresses that doctors not billing or receiving payment in full at the time of service will not result in the optometrist being considered a creditor under the Red Flags Rule.

For more information on the Red Flags Rule from the AOA, including information for optometrists seeking to voluntarily develop a program to combat identity theft, visit www.aoa.org/x12701.xml.

AOA members with questions or concerns should contact the AOA Washington office team at 800-365-2219 or ImpactWashingtonDC@aoa.org.

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