FTC Compliance: A Comprehensive Guide for Businesses

FTC Compliance: A Comprehensive Guide for Businesses

The Federal Trade Commission (FTC) Safeguards Rule is a set of mandated regulations that require certain businesses to implement safeguards to protect the security of customer information. This includes any business that collects, maintains, or uses sensitive customer information such as SSN, credit card numbers, medical records, and personal financial information. These businesses include financial institutions, healthcare providers, credit reporting agencies, car dealerships and more.

FTC compliance means that a business has implemented a comprehensive information security program that is designed to protect customer information from unauthorized access, use, disclosure, disruption, modification, or destruction. This program must be documented and implemented in writing.

The FTC Safeguards Rule includes seven specific rules that businesses must follow:

  1. Designate a qualified individual to oversee the information security program.
  2. Develop and implement written policies and procedures to control risks to customer information.
  3. Designate and implement appropriate security measures to control access to customer information.
  4. Take steps to reasonably safeguard customer information in electronic form.
  5. Train employees on the information security program.
  6. Develop and implement procedures to respond to unauthorized access to or use of customer information.
  7. Regularly monitor and test the effectiveness of the information security program.

The penalties for non-compliance with the FTC Safeguards Rule can be quite significant. The FTC can impose penalties up to as much as 100k per violation, an additional 10k against officers and directors and damages for consent violations that can total 43k a day for each violation and litigation. All the above can then cause reputational damage to your business.

FTC Safeguard Rules and Your Cybersecurity

The FTC Safeguards Rule is an important part of cybersecurity because it requires businesses to implement safeguards to protect customer information.

By complying with the FTC Safeguards Rule, businesses can help to protect themselves from cyberattacks and the financial and reputational damage that they can cause.

There are numerous steps that businesses can take to comply with the FTC Safeguards Rule. These steps include:
  • Identifying and keeping inventory of the information they have on clients and employees
  • Scheduling risk assessments
  • Outlining plans on how data will be protected
  • Written response plans
  • Identifying qualified individuals who are responsible for overseeing, implementing and enforcing the security program
  • Monitoring/Limiting who has access to sensitive client and employee information
  • Encrypting all sensitive data
  • Training for employees
  • Developing a response plan
  • Implementing a 2 factor authentication
  • Discarding of customer information two years after most recent use
  • Anticipating and evaluating changes to information or network

Businesses can also obtain guidance on FTC compliance from the FTC website or from a qualified IT security consultant.

The Vector Choice Advantage

Vector Choice is here to assist your business with the FTC Safeguard Rules. We offer a free PEN test and Vulnerability Assessment that will help you identify and mitigate your cybersecurity risks to see if you comply with the rules and protect your clients' and employees' data.

From there, we can implement our services to assist with complying with the FTC Safeguard Rules that will protect your business financially, your clients and employees sensitive information and keep the reputation of your business in a positive light.

For more information, including the 13 different entities on the list of financial institutions covered under the FTC Safeguards, view or download our free online eBook by filling out the form below.

Webinar: Get FTC Compliant Before Tax Season. Watch it here.

To schedule your free Pen Test and Vulnerability Assessment follow the link here.

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