Category: Data Security

Categories
Data Security

Safeguarding Your Data

The Federal Trade Commission (FTC) Safeguards Rule goes into effect June 9, 2023. Did that date sneak up on you? Will your dealership be compliant, or is your team still trying to figure out what IT upgrades are needed to secure private customer data? Let’s breakdown the Safeguards Rule, see how it impacts your dealership and outline steps to consider while working on this compliance initiative. If you’d like another source of information to share with your team, check out EFG’s latest F&I Talk Outside the Box podcast.

Originally enacted in 2003, the FTC amended the Safeguards rule in 2021, but extended the deadline for compliance to June 9th of this year, giving dealerships more time to incorporate the needed equipment and procedures. Specifically, the new requirements include:

  • Designate a qualified individual to oversee your information security program.
  • Develop a written risk assessment.
  • Limit and monitor who can access sensitive customer information.
  • Encrypt all sensitive information.
  • Implement ongoing security personnel training.
  • Develop an incident response plan.
  • Perform periodic assessments of service provider security practices.
  • Implement multi-factor authentication, or another method with equivalent protection, for any individual accessing customer information.

That’s a lot to absorb! Let’s focus on the key component of data security.

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Categories
Compliance Data Security

What IS a CISO?

Contributing Author:
Maurice Hamilton
Vice President
EFG Companies

If you’re in the retail automotive business, you’re used to dealing with regulations and compliance issues. It’s simply part of doing business. However, sometimes when a new regulation comes down, it’s all too easy to balk at the potential increased cost in both financial and time investment to implement them. Right now, there is a lot of talk about updating the Safeguards Rule, and the potential business impact.

Let’s step back and look at the regulation. As part of the Gramm-Leach-Bliley Act, the Safeguards Rule was designed to protect the security, confidentiality, and integrity of customer information.

16 CFR Part 314 Rule Summary:

The Safeguards Rule requires financial institutions under FTC jurisdiction to have measures in place to keep customer information secure. In addition to developing their own safeguards, companies covered by the Rule are responsible for taking steps to ensure that their affiliates and service providers safeguard customer information in their care.

While it is in the inherent best interest of a dealership and its partners to protect and secure customer data, a new wrinkle was recently added that has many in retail automotive scratching their heads. The April 4th issue of the Federal Register contained an update to the Federal Trade Commission’s Notice of Proposed Rulemaking concerning the Safeguards Rule. This issue included several additional requirements that will impact dealerships. One of the most pervasive is the requirement for a Chief Information Security Officer (CISO), which begs the question – what the heck is a CISO and where do you find one?

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Categories
Data Security

Are You Ready for a Data Breach?

Contributing Author:
Maurice Hamilton
Vice President
EFG Companies

Experian’s Data Breach Resolution Group, a division of the consumer credit reporting company, recently issued their 2019 Data Breach Industry Forecast. While the report was full of important information, it made me wonder if the retail automotive industry is suffering from “Hurricane Syndrome.” You know the scenario. Weeks in advance, the weather pundits issue warnings that a hurricane is coming. Only a few people pay attention. A week before landfall, the cone of probability is posted. Most people continue to go about their business. Two days before landfall, winds are picking up and early rain bands are hitting. Some people might check the pantry and fuel gauge. Then the hurricane hits with full fury, flooding ensues, roofs are blown off, and emergency services are tapped out. In the aftermath, local news reporters interview victims who say, “We didn’t think it would be that bad!” 

It’s been 13 years since the first major data breach impacted a US financial institution. According to the Experian report, the scale of data breaches in 2018 was staggering, with the number of compromised records in the first half of 2018 exceeding those for the entire previous year. Despite major security advancements, cybercriminals and black-hat hackers continue to wreak havoc on businesses. With automotive dealers and lenders moving further toward online sales, the risk of a data breach increases exponentially. While the industry must embrace this growing trend, dealers must also break out of their own data security Hurricane Syndrome.  

While the Experian report is broad reaching, two predictions have specific application to retail automotive.  

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