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FTC Safeguards Rule
Is your dealership prepared to comply with the Federal Trade Commission’s new Safeguards Rule applying to customer information?
The Safeguards Rule, which applies to all auto dealers, requires you to develop a written Information Security Program that will protect the security, confidentiality, and integrity of your customers’ private information. This rule is effective as of May 23, 2003. Failure to comply may result in significant Federal penalties of up to $11,000 per day and/or risk of litigation from customers.
By now many of you have received the NADA publication, "A Guide to Safeguarding Customer Information," or have otherwise received guidance on how to comply with the FTC’s new Safeguards Rule. If you have received conflicting information or are unsure about how your organization needs to address these new regulations, you are not alone.
Getting into compliance with these new Federal regulations may be a difficult task for your organization to handle without proper guidance. BlumShapiro, one of the region’s leading professional accounting firms and specialists in dealerships, is pleased to offer a cost-effective solution that was developed after extensive research by some of the leading CPAs and attorneys in the auto dealer industry.
How can you meet the new requirements?
As part of the Information Security Program, each dealer must take specific steps to ensure compliance with this new Federal regulation including:
- Identify and assess the risks that exist in your dealership that customer information is not properly safeguarded in accordance with the law, and evaluate the effectiveness of the current safeguards for controlling these risks. This will require a diligent assessment of the flow of both electronic and non-electronic customer information through your dealership from the point at which the information is received by your dealership all the way to point at which your customer information is disposed. It will also require identification and analysis of all outside vendors who receive or have access to your customer information.
- Design and implement an Information Security Program which will include:
- Written safeguard policies for your dealership that address the risks identified in the risk assessment phase, and identification and implementation of your new safeguarding procedures;
- A formal training program for both current and future employees;
- A plan to regularly monitor and test your safeguards; and
- A plan to manage your employee’s adherence to these regulations including the need to designate a program coordinator or a team of coordinators who are employees of your dealership.
How can we help you comply?
Our professionals are ready to work with your dealership to assist you in developing an Information Security Program that will comply with FTC regulations. We will provide you with our Prototype Information Security Program and tailor our services to fit the needs of your dealership.
Included in our Program are:
- Risk assessment questionnaires that allow you to efficiently accomplish the risk assessment process,
- Written information security policies that can be quickly tailored for the needs of any dealership;
- Training presentations (including speaker notes) that have been created to allow for the prompt training of all employees on both the FTC regulations as well as your specific policies;
- Program monitoring and testing procedures that can be used to remain in compliance once you have completed your written program; and
- Many additional helpful documents including sample employee acknowledgement forms, sample contract addendums required for all vendors who have access to your customer information, service provider questionnaires, and helpful tips for setting up your DMS access rights and evaluating your information technology infrastructure.
Our prototype Program will be provided to you in a Word document format so that you can easily edit and customize your program as desired.
The Program was designed to be easy to use and implemented by your dealership staff. However, our staff will also be available to assist you in performing the necessary risk assessments for an additional fee if needed. Price for the Program is dependent upon the number of dealership locations, with each requiring its own Program.
Why choose BlumShapiro to assist you?
BlumShapiro, based in Connecticut, has an extensive practice in providing accounting, auditing, tax and consulting services to automobile dealerships throughout the state and region. Our team of specialists has over 40 years of combined dealership experience.
Through our affiliation with Auto Team America, a national association of professional accounting firms specializing in dealerships, we are able to provide you with a solution to these new regulations. Rather than bogging down yourself and key members of your organization, consider allowing us to help you. Because of our knowledge, experience and preparation, we are poised to get your dealership in compliance with these regulations with minimal disruption to your daily operations and in an efficient manner.
If you would like assistance with implementing a compliance program or would like more information on this unique product, please contact us using the form below.
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