Automobile dealers don’t just sell vehicles, they do credit checks and issue loans as well. Because of this, dealers store important customer data, such as addresses, social security numbers and other personal identifiable information.
And if dealers aren’t compliant with new federal regulations by December 9 regarding how this information is handled, they could face financial penalties.
These federal regulations are part of the Gramm-Leach-Bliley Act and Privacy Rule.
GLBA was enacted on November 12, 1999, to reform the financial services industry and address concerns about consumer financial privacy. In 2022, changes were made to the Act that require dealerships to increase cybersecurity measures to protect consumer data. These changes include creating a security strategy, conducting risk assessments and training employees.
Auto dealers also must inform customers about what personal information they are collecting, what they will do with it and other entities that will receive the information.
Dealerships are required to comply with the new regulations by the deadline, or they could be subject to fines. They also must comply with the Federal Trade Commission’s Privacy Rule.
According to the FTC, the Privacy Rule applies to car dealers who:
- Extend credit to someone in connection with the purchase of a car for personal, family or household use
- Arrange for someone to finance or lease a car for personal, family or household use
- Provide financial advice or counseling to individuals
“Traditional financial institutions are familiar with the Act and its requirements,” said Sarah Duncan, an account executive for HORNE’s Cyber division. “This is new for auto dealerships, but because they deal with information that can identify their customers, they also will have to comply with GLBA and the FTC’s Privacy Rule.
“Because they haven’t had to follow these regulations, it can seem complicated,” Duncan said. “But with some information and guidance, auto dealers will be well equipped to adhere to the new requirements.”
For help complying with GLBA and the FTC’s Privacy Rule, contact HORNE today.