Exam CIPP-US topic 1 question 133 discussion

The correct answer is: B. The definition of what constitutes a creditor. Reference: The IAPP textbook, U.S. Private-Sector Privacy, 4th Edition, 2024, Section 9.2.2 The Red Flags Rule: "The Red Flag Program Clarification Act of 2010 was passed in response to concern that the definition of creditor extended to implicate unintended entities, such as attorneys and health providers, simply because they allow customers to pay their bills after the time of service. The clarification narrows the previously broad definition of creditor, as well as the circumstances under which they are covered by the rule. It eliminates entities that extend credit only “for expenses incidental to a service.”"

The Red Flag Program Clarification Act of 2010 was passed in response to concern that the definition of creditor extended to implicate unintended entities, such as attorneys and health providers, simply because they allow customers to pay their bills after the time of service

In 2010 it was determined that the Red Flags Rule does not apply to creditors who extend credit only for “expenses incidental to a service” (such as lawyers and health providers)