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In the course of day-to-day business, dealerships collect personal information from consumers, including names, addresses, and phone numbers; bank and credit card account numbers; income and credit histories; and Social Security numbers.
The Federal Safeguards Rule, which was enacted in 2003 and enforced by the Federal Trade Commission, requires dealerships to have a security plan to protect the confidentiality and integrity of personal consumer information.
Since most dealerships are far more technologically advanced than they were when the Safeguards Rule first came into play, protecting consumer information has become quite a bit more challenging. It’s no longer just a matter of making sure that credit apps aren’t laying on top of desks in the showroom or that deal jackets are stored in locking cabinets.
The potential consequences for non-compliance with the Safeguards Rule are substantial. Besides private lawsuits and reputation damage, civil penalties of up to $10,000 per violation can be assessed, along with criminal penalties which could include imprisonment and fines.
In case you haven’t noticed, it’s become painfully apparent that the FTC has placed car dealers on its enforcement radar screen recently. So, if you haven’t done so in a while, now may be a good time to dust off your Information Safeguards Policy and update it as needed. Following are some recommended guidelines and best practices for a modern Safeguards Program:
These steps require some diligence but are well worth the effort compared to possibly dealing with lawsuits, regulatory actions, or hits to your valuable reputation. Do yourself and your customers a favor by following best practices for protecting personal information.
Written by Jim Radogna
Views: 200
Tags: Compliance, FTC, Federal Safeguards Rule, Federal Trade Commission, Information, Safeguards, Technology
Comment
Thanks Tom!
Jim, that is a great checklist. Thank you!
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