According to the Blog of Legal Times the FTC has filed a notice of appeal in the D.C. Circuit Court of Appeals of an October decision (PDF) upholding the ABA's position that the Red Flags Rule doesn't apply to lawyers. The rule requires businesses to put warning systems in place to spot problems of potential identity theft. Despite the fact that the act does not mention lawyers and was widely understood to apply to the financial sector, the FTC has asserted that the rule applies to lawyers because lawyers qualify as "creditors" under the Fair and Accurate Credit Transactions Act. A "creditor" is any party that regularly permits deferred payments for goods and services, and, says the FTC, payments to lawyers are typically deferred until the completion of work. Not so said the ABA's brief. "A lawyer does not regularly extend' credit merely by providing services to a client in advance of billing for those services. In fact, state rules of professional conduct generally prohibit lawyers from receiving compensation before services are rendered."
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