Identity Theft Articles

CMSS Joins Lawsuit Against FTC 'Red Flags Rule'

More medical groups join the lawsuit against the FTC

The controversial Red Flags Rule that resulted in many medical organizations launching a lawsuit against the Federal Trade Commission will see a new adversary join the fight.

The Council of Medical Specialty Societies has announced that it will partner up with the American Medical Association among others in their lawsuit against the FTC, in hopes of being exempt from the ruling set to go into effect on December 31, 2010, according to HealthLeaders Media. The Red Flags Rule will require institutions - including banks, credit card issuers and car dealerships - that process certain financial transactions to establish industry-specific rules for detecting and resolving cases of identity theft.

Many medical groups have joined together to battle the FTC's decision to include hospitals and clinics in the ruling, saying that their services do not conform to that of banks and other financial institutions, and therefore should not include them in the definition of "creditor." However, the FTC notes that compliance extends to organizations that provide up-front services, allowing customers to make installment payments later.

The CMSS represents 650,000 physician specialists, according to the website. The group told the website that if they are forced to comply with the FTC's rules, it will "impose significant burdens particularly [on] solo practitioners and those practicing in small groups."

Although hospitals and medical clinics are fighting for exemption from the Red Flag Rules, medical identity theft is becoming more prevalent across the U.S. Many technology analysts and consumer advocates expect this trend to increase as hospitals make the transition from paper medical records to an electronic database system, which will store the files of all U.S. patients online. Although the system is expected to provide more efficiency in the medical field, insufficient protections may also lead to more data breaches.

Additionally, there is a growing concern over the high incidence of medical identity theft because it represents a unique, and perhaps more dangerous type of crime. When a criminal gains access to a consumer's medical files, they may obtain not only financial information from their records, but also health data. This information may be used by a criminal to obtain services and prescriptions under their victim's name. If the thief does receive services, any changes to the legitimate victim's medical file could result in harm or death if they are given treatment in an emergency situation that may interfere with certain health conditions.