News

December 6, 2021

Changes to FTC Safeguards Rule could mean additional costs for dealers

According to Automotive News, the cost of complying with the FTC's expanded Safeguards Rule will ultimately depend on how well dealers have been adhering to requirements under the original rule that took effect in 2003 and whether they have prioritized cybersecurity best practices at their dealerships. Dealers must begin putting pressure on their technology vendors to ensure they can meet the data security requirements. The National Automobile Dealers Association said it is advising its franchised dealer members to make sure they're fully complying with the current requirements and that they also contact their technology vendors as soon as possible to ensure they can meet new obligations under the amended rule.

"The previous version of the rule and this version continue to have a requirement to oversee these service providers you have regarding safeguarding and making sure that they have a compliant safeguards program," said Dailey Wilson, an associate in Hudson Cook's Tennessee office.

Dailey focuses her practice on federal and state regulatory compliance for alternative financial services providers, including consumer installment lenders, payday lenders, title lenders and rent-to-own providers. Dailey frequently assists alternative financial services providers with drafting consumer-facing documentation, ranging from applications to collections communications as well as internal policies and procedures. Dailey also routinely audits alternative financial service providers for compliance with state and federal law.

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