Protecting Customer Data: The Importance of Compliance with the FTC Safeguards Rule for Auto Dealerships
Are you an auto dealer? If so, then brace yourself as you only have a few months left to comply with the newly updated Federal Trade Commission (FTC) Safeguards Rule. Auto dealerships have long been targeted by cybercriminals seeking to steal sensitive customer information. With the advent of digital platforms and online transactions, the risks have only increased.
The FTC has responded by updating the Safeguards Rule to better protect consumers from cyberthreats. The updated Safeguards Rule is more comprehensive and imposes stricter standards on auto dealerships. As a result, dealerships must take immediate steps to comply with the new requirements, or face the consequences.
The FTC Safeguards Rule: What is it?
The Safeguards Rule, originally introduced in 2003, requires financial institutions, including auto dealerships, to develop and maintain a comprehensive information security program. The program should be designed to ensure the confidentiality, integrity, and availability of customer information. The Safeguards Rule aims to protect consumers from identity theft and other types of fraud resulting from the mishandling of personal data.
The Updated FTC Safeguards Rule: What has Changed?
The updated Safeguards Rule imposes more rigorous requirements on auto dealerships. For instance, dealerships must now identify and inventory all devices and software that store customer data, including mobile devices and cloud-based applications. Additionally, dealerships must perform periodic risk assessments, develop and implement employee training programs, and ensure that all data disposal methods are secure and effective.
Who Must Comply with the FTC Safeguards Rule?
All auto dealerships that collect, process, store, or transmit customers’ nonpublic personal information (NPI) must comply with the Safeguards Rule. NPI includes any data that can be used to identify an individual, such as social security numbers, driver’s license numbers, and financial account information. The rule applies to franchised and independent dealerships, as well as buy-here-pay-here dealerships.
Consequences of Non-Compliance with the FTC Safeguards Rule
Auto dealerships that fail to comply with the Safeguards Rule risk facing significant fines and penalties, as well as legal action from affected customers. The FTC may also initiate an investigation into the dealership’s data security practices, which could result in additional penalties and damage to the dealership’s reputation. Failing to comply with the FTC safeguards rule risks a fine of up to $46,517 (per incident) for auto dealers. Furthermore, a data breach could lead to costly litigation, lost business, and damage to the dealership’s brand and customer loyalty.
Start Your Compliance Journey Sooner Than Later
Compliance with the updated FTC Safeguards Rule is critical for auto dealerships. Dealerships must prioritize data security and implement effective measures to protect customer information. By complying with the rule, dealerships can mitigate the risk of data breaches, prevent fraud, and maintain the trust of their customers.
To achieve compliance, dealerships should conduct a comprehensive review of their data security policies and procedures, and seek assistance from experts in the field if necessary. Luckily, at Isogent we have developed an entire program specifically to help auto dealerships become and stay compliant with the Safeguards Rule.
Achieve Safeguards Rule Compliance With Isogent’s Compliance Program
With our Safeguards Rule Compliance Program, your organization will become and maintain compliant within the newly updated requirements of the FTC Safeguards Rule. Set up a compliance assessment today with one of our experts to see how close your dealership is to achieving compliance.