Since 2003, dealerships have been charged with safeguarding and protecting consumer information. Many of our clients have worked diligently to comply with the Federal Trade Commission’s requirements. Coordinators were assigned, risks were assessed, policy manuals were written, and tests were conducted. Our firm might have even assisted your dealership in completing these tasks.
The world has changed nearly twenty years later, and new threats emerged. Twenty years ago, the biggest worry would be a theft physically walking out with a deal jacket of a customer. Today, the information in that deal jacket is stored online.
Cybersecurity and attacks from unseen actors potentially half a world away have become almost commonplace. The changes to the FTC’s requirements attempt to address these concerns by layering several new requirements for dealerships.
The penalties under the rules for failure to comply are enormous and potentially business-ending. Every dealership must set forth a plan and abide by the significant new provisions by December 9, 2022.
Since most of these requirements involve your IT infrastructure, your DMS, and other vendors, it became clear that safeguarding compliance would no longer be possible for DIY. Only the largest dealer groups would be able to perform the activities themselves. Most Dealer Associations appear to agree, as partnerships and recommendations are being made for vendors to “outsource” their compliance under the new rules.
While outsourced solutions solve the new wave of regulations, they do not replace what you have been doing for the past 19 years. You still need some boots on the ground to conduct non-digital security checks. Since Withum was involved with many of our client’s initial safeguarding programs, it has been natural to ask for our opinion and what we have observed in the dealership community. We are pleased to continue to offer our advice and suggestions to our clients about their options and help you decide the best path for your dealership. If you have any questions or concerns, please get in touch with the Withum partner overseeing your dealership.
For more information on this topic, please contact a member of Withum’s Dealership Services Team.