Is Your Financial Business Affected By The FTC Safeguard Rule Deadline On June 9, 2023? Read On…

by | Jun 1, 2023 | ATC Tech Blog

The FTC Safeguards Rule

A recently revised U.S. Federal Trade Commission (FTC) ruling – the Safeguards Rule – requires non-banking financial institutions to develop, deploy and maintain a comprehensive security program to keep customer financial data safe. With the growing number of data breaches and evolving security threats, organizations need to advance their security programs to protect the confidentiality of customer information.

The updated rule requirements include:

  • Planning and action to address “reasonably foreseeable internal and external risks” – including: data breaches, data leakage, and ransomware
  • Multi-factor authentication

Why Should Small And Medium Size Business Care?

The FTC’s Safeguard Rule applies to any business that handles consumer data, regardless of size. Small and medium-sized businesses are as susceptible to date breaches as larger corporations, and the fallout from the breach is devastating.

 Applies to any business that handles consumer date, ragWhat organizations are affected?

It’s important to note that the FTC definition of financial institutions includes non-financial institutions. Essentially, any organization that handles customer financial data and engages in transactions that use personal consumer information are impacted. Some examples include:

  • Mortgage lenders
  • Mortgage brokers
  • Payday lenders
  • Finance companies
  • Account servicers
  • Automobile dealerships
  • Wire transferors
  • Collection agencies
  • Tax preparation firms
  • Credit counselors and other financial advisors
  • Retailers that issue their own credit cards
  • Non-federally insured credit unions
  • Personal property or real estate appraisers
  • Travel agencies in connection with financial services
  • Investment advisors not required to register with the SEC

    Failure to comply with the FTC Safeguards Rule can result in significant fines and damage to your business’s reputation. The updated guidelines that go into effect on June 9, 2023, dictate that FTC can impose penalties of up to $100,000 per violation.

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