Is your organization ready for the new FTC Safeguards Rule? It’s affecting more than just what you may consider “financial institutions,” and businesses are having to get compliant fast – or face fines and other consequences. Here’s how a CMMC compliance expert and managed IT services can help ensure you’re meeting the new regulations, and in time for the deadlines.
What Does the FTC Safeguards Rule Entail?
Officially known as the Federal Trade Commissions’ Standards for Safeguarding Customer Information, the Safeguards Rule was put into place in an effort to better secure customer information. Although it was technically put into place almost 20 years ago, the revised guidelines have more concrete requirements for businesses that go beyond many people’s standard definition of “financial institutions.”
As a result, companies now have to develop an information security program with plans that protect customer information, increase cybersecurity, and prevent unauthorized access that could cause harm to customers. The 9 elements this program needs to include are:
- A Qualified Individual who can implement and supervise the company’s information security program
- A risk assessment and plan
- Safeguards that control the identified risks, such as reviews of access controls, customer information encryption, threat detection, and multifactor authentication
- Testing and monitoring of the safeguards
- Staff training
- Monitoring of service providers
- Regular updating of the information security program
- A written incident response plan
- Regular reports to the Board of Directors from the Qualified Individual
What Companies Are Affected by the New Rule?
When people think of “financial institutions,” they usually think of banks, credit unions, and the like. However, the FTC Safeguards Rule is expanding that definition to include a number of other businesses that wire money, extend their own lines of credit, sell vehicles, offer check cashing, prepare taxes, advise on investments, and more. The only companies that are exempt are ones that have 5,000 clients’ data or less, but this includes past clients and their data as well!
What Will Happen if You’re Not Compliant With the FTC Safeguards Rule?
The major risk you’ll be facing if you’re not compliant with the new guidelines by the deadline of June 9, 2023, is the fines. Companies will see penalties of up to $43,792 per violation per day if they’re not compliant! Ignoring these standards completely or failing to be prepared can put your entire business at risk. And, not to mention, the cost of noncompliance could be over 3x higher than the cost of compliance.
However, this isn’t the only risk your company could face. The requirements of the FTC are actually good business practices for a number of industries. Leaving your door open for risk can increase your chances of facing security breaches and loss of productivity. Not to mention the reputation damage your company will suffer if you fall victim to a cyberattack. It’s essential to have a strategy to meet compliance standards, protect your business, and keep cybercriminals at bay.
How Can a CMMC Compliance Expert Help You Prepare for the New Regulations?
The FTC Safeguards Rule deadline is only a few months away. The time to take action is now with managed IT services, not a week before the deadline. Designing an information security program that fits your business’ unique needs and customer base takes time. And these new guidelines are indicative of changing (and tightening) data security rules. This won’t be the last time you have to adjust your information security strategy to fit new regulations. In fact, many states, including California, Virginia, Utah, Connecticut, and Colorado, have already put compliance programs on the books – and if you do business there, you’ll have to meet those regulations and any new ones in the future.
But working with a Cybersecurity Maturity Model Certification (CMMC) compliance expert, you can rest assured you have a solid plan for creating your information security program and for meeting any current and new state and federal security requirements. By working with VersaTrust, you can partner with CMMC compliance experts that help you meet the regulations put forth by the FTC, prepare for the future, and protect both your company and your customers.