* Editor's note: the FTC has pushed the deadline back to June 9, 2023.
There has never been a more exciting time to be a part of the auto retail industry. For many of us, including myself, the changing day-to-day is what keeps us engaged and interested in coming to work every day. Some of the changes we deal with on a regular basis make our businesses stronger and make our customers happier, but some changes, including those mandated by the federal government, add tenuous requirements to our daily operating procedures and negatively impact our ability to serve our customers.
One such issue that is particularly timely is the Federal Trade Commission (FTC) Safeguards Rule, which was amended in 2021. The Rule mandates a significant number of new and expanded technical and systems’ requirements that financial institutions, including dealers, must implement to meet their information security obligations regardless of an organization or dealership size. The FTC provides insights into the requirements in their guidance publication, FTC Safeguards Rule: What Your Business Needs to Know.
As of December 9, 2022*, all dealers must be in compliance with the amended Rule. In response to NADA’s input, the FTC made significant changes and provided clarity to the Rule, but many of the amendments in the final rule require dealerships to adopt significant new information security measures.
While the heat of the summer makes December feel very far off, dealers should begin to lay the foundation for their compliance strategy. Luckily, NADA has a number of member resources to get you started, including a set of FAQs, several webinars (including A Dealer's Solution for the Revised Safeguards Rule and The Amended FTC Safeguards Rule - Overview and Update), and a comprehensive and updated Driven Guide, A Dealer Guide to the FTC Safeguards Rule containing extensive templates, exhibits, IT guidance and more.
In addition, there is an upcoming webinar (on Tuesday, July 26) with an FTC attorney that you should not miss, where you can hear the FTC answer dealer questions directly.
These materials can serve as informational resources for you, your legal counsel, and your IT compliance experts as you take steps to ensure compliance by the FTC’s deadline.
Please don’t wait to focus on this new Rule. We all have a number of issues we are handling on behalf of our businesses, but this is not a Rule you can comply with overnight, it takes some time. Get started NOW on this important compliance deadline – it cannot wait!
Note: This article is offered for general informational purposes only and is not intended to constitute legal advice. Each dealer should seek their own legal counsel and make their own independent business decisions and work with their attorneys and IT consultants to ensure compliance.