The Federal Trade Commission filed a 75 page brief this past Wednesday in an appeal from the United States District Court for the District of Columbia, arguing that lawyers should be held to the "red flag" standards that have pushed creditors to increase their role in the prevention of identity theft.

The appeal stems from the American Bar Association's suit against the FTC for its regulations of the legal profession and loose interpretation of the term "creditor" In August 2009.  U.S. District Judge Reggie Walton of the District of Columbia ruled in favor of the American Bar Association.

The FTC states in the brief that the definition of "Creditor" in the Fair and Accurate Credit Transactions (FACT) Act of 2003 and the Equal Credit Opportunity Act indeed encompasses lawyers. The brief states, "The entities to be covered under the identity theft provisions are to be covered based either on their status as a “financial institution” or on activities that make them a “creditor.”

Since lawyers often take cases without being paid in advance, the FTC, in this definition, argues that they should be considered to be creditors.

Recently, Lawline.com's Yan Ross produced two CLE programs on this issue. The identity theft expert examines the newly implemented anti-identity theft legislation and the ethical implications of complying with the FTC’s Red Flags Rules.

In his first program, FTC's Red Flags Rules Series: Ethical Implications for Attorneys and Their Clients, Mr. Ross engages the viewer in a discussion of the tangible and intangible costs and benefits of observing the new regulations and the reasons why attorneys have been exempted from compliance in his program .

Ross also examines the FTC’s role in policing identity theft and discusses the principal provisions of the Red Flags Rules in a second program entitled, FTC's Red Flags Rules Series: Are You Ready for Enforcement? Talking points include the history and development of the new legislation and the practical implications of compliance with the rules, and penalties for non-compliance.