What is the FTC Safeguards rule and how does it apply to my small business?
By definition, the FTC Safeguards Rule is a regulation established by the Federal Trade Commission (FTC) in the United States to protect consumer information held by financial institutions. The rule requires these institutions to implement reasonable administrative, physical, and technical safeguards to protect consumer information from unauthorized access, use, or disclosure.
If your small business is a financial institution or if you handle sensitive consumer information in the course of your business, the FTC Safeguards Rule may apply to you. The rule requires you to implement reasonable measures to protect consumer information, such as:
– Developing a comprehensive information security plan that includes administrative, physical, and technical safeguards to protect consumer information.
– Designating employees to be responsible for information security.
– Training employees to follow information security procedures and to understand the importance of protecting consumer information.
– Regularly monitoring and testing security systems and processes.
– Taking steps to secure data stored on laptops, mobile devices, and other portable storage devices.
– Disposing of consumer information securely, for example by shredding paper records and securely wiping electronic data.
– Requiring service providers to implement appropriate safeguards when handling consumer information.
In summary, the FTC Safeguards Rule requires financial institutions and other businesses that handle sensitive consumer information to implement reasonable security measures to protect that information from unauthorized access, use, or disclosure. If you are a small business owner, it is important to understand whether the rule applies to you and to take appropriate steps to comply with the regulations. Have questions? Give the experts at Insperia a call.
