The Federal Trade Commission (FTC), which regulates banks, and the National Credit Union Administration (NCUA) have delayed mandatory compliance with the Red Flag Rules for six months. Why should you care? As a dentist, if you extend or arrange to extend credit to any patient, you must comply with the Red Flag Rules.
The purpose of the rules is to keep everyone safe from identity fraud/theft. Your dental practice will need to come up with a written program to identify the “red flags” of identity theft. According to the FTC website, “These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program. The program must be managed by the Board of Directors or senior employees of the financial institution or creditor, include appropriate staff training, and provide for oversight of any service providers.”
The legal department at the ADA has stepped in to find out exactly what the Red Flag Rules mean to dentists and whether dentists must comply. The short answer is yes, dentists must comply. The long answer will be delayed. A press release by the FTC indicates that the agency has become aware of entities who aren’t sure if they must follow the Red Flag Rules. The FTC has delayed the implementation date to work out these issues. It has moved from November 01, 2008 to May 01, 2009.
The ADA plans to offer a compliance program for member dentists if the FTC deems dentists must comply with the Red Flag Rules.
According to an article at DentalCompare.com, one item in the rules that has not been delayed involves dentists. It mandates that as of November 01, 2008, businesses who obtain credit reports to report discrepancies in addresses (between the one on the report and the one the patient submits) to the credit agency.