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New FTC Safeguards Rule

700Credit can help prepare your dealership for the new compliance requirements

The Federal Trade Commission (FTC) has finalized changes to the Standards for Safeguarding Customer Information rule (Safeguards Rule) under the Gramm-Leach-Bliley Act (GLBA). The updated Safeguards Rule amends the FTC’s 2003 Safeguards Rule and requires financial institutions (which includes Dealers) to strengthen their data security safeguards to protect customer financial information. Compliance with the updated Safeguards Rule is required by December 9, 2022.

Watch our educational webinar on the New FTC Safeguard Rules

We will cover each new rule and your dealership’s obligations

How this affects your dealership

The updated Safeguards Rule now includes specific criteria for what safeguards financial institutions must implement as part of their information security program. Previously, similar rules provided only general guidance and not specific requirements.

Among other requirements, the updated Safeguards Rule mandates the following:

Designation of Qualified Individual:

Designate a qualified individual to be responsible for the information security program.

Written Information Security Program:

Establish a comprehensive written information security program, including designating a qualified individual for overseeing and implementing the program.

Risk Assessments:

Undertake risk assessments and implement safeguards to address identified risks. Assessments must be in writing and include criteria for evaluating and identifying security risks, as well as ways to mitigate or accept those risks. Risk assessments must be performed periodically to reassess the reasonably foreseeable risks to the security of customer information.

Penetration Tests and Vulnerability Assessments:

Annual penetration tests of information systems. Vulnerability assessments, including any system scans or reviews of information systems, must be completed every 6 months.

Encryption of Customer Information at Rest and in Transit:

Encrypt all customer information, both in transit over external networks and at rest.

Service Provider Oversight:

Take reasonable steps to select and retain third-party service providers that maintain appropriate safeguards for customer information and periodically assess service providers to ensure compliance.

Additional Training Requirements:

Update the training for employees based upon risk assessments and/or changes in practices and verify that training requirements have been met.

Multifactor Authentication:

Implement multifactor authentication for individuals accessing networks that contain customer information. Authentication measures may include (1) knowledge factors (a password); (2) possession factors (a token); or (3) inherence factors (biometric characteristics).

Logging and Disposal of Customer Information:

Develop, implement, and maintain procedures for the secure disposal of customer information no later than 2 years after the last date the information was used, unless otherwise required to retain the information longer, and implement policies, procedures and controls designed to monitor and log the activity of unauthorized users and detect unauthorized access, use or tampering with customer information.

Reports to Board of Directors:

The qualified individual must provide written reports at least annually to boards of directors or governing bodies on the financial institution’s information security program. Including information on the overall status of the information security program and the financial institution’s compliance, and material matters related to the information security program (such as risk assessments and recommended updates to the program).

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Dealers must be compliant with the above rules by December 9th, 2022 or face the risk of heavy fines.

The 700Credit Learning Management System helps prepare your dealership

To further our efforts in providing the best compliance and risk mitigation services to our clients, we are pleased to provide a web-based, self-paced Compliance platform which will provide the required training your dealership needs to remain compliant with every transaction and avoid costly fines. Our learning management system will cover all of the necessary content to help your dealership comply with the new FTC Safeguard Rules.

Have questions about the new Safeguard Rules?

700Credit stands ready to help your dealership succeed. Fill out our questionnaire and a member of our team will reach out to you shortly.

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I really like the new compliance-based learning management system that 700Credit provides us at the dealership. The courses provide a lot of valuable information that was new to me at the dealership. I will start to incorporate all the newly learned best practices into our current compliance practices. It is also great that I can always retake and refresh myself throughout the year. I strongly recommend this for all dealerships.

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Meagan Jensen
Finance Manager
Young Powersports Centerville
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