The American Institute of Certified Public Accountants ("AICPA") challenged application of the Federal Trade Commission’s Red Flags Rule to accountants. In its lawsuit, filed in U.S. District Court for the District of Columbia, the AICPA alleges:
- that the FTC is exceeding its congressionally granted powers under the 2003 law by interpreting its Red Flags Rule to apply to accountants;
- that the FTC has acted arbitrarily, capriciously, and contrary to law by failing to articulate a rational connection between the profession of public accounting and identity theft;
- that the FTC failed to explain how the manner in which public accountants bill their clients in the normal course of business constitutes an extension of credit; and
- that the FTC failed to identify any legally supportable basis for applying the rule to accountants.
The AICPA’s challenge follows the recent ruling by the U.S. District Court for the District of Columbia that the Red Flags Rule is not applicable to lawyers.
Coverage of the lawsuit is available here.