What New York Car Dealerships Need to Know About the New Compliance Laws

Car dealerships across New York are now required to meet new compliance standards set forth by the Federal Trade Commission’s (FTC) Safeguards Rule. This federal regulation mandates stricter security protocols to protect customer data, directly impacting how car dealerships operate in Buffalo, Rochester, Syracuse, and beyond. Non-compliance comes with hefty penalties—up to $50,000 per violation—making it essential for dealerships to understand and adhere to these requirements.

Here’s a closer look at the key aspects of the FTC Safeguards Rule and how car dealerships in Western New York can stay compliant.

Key Requirements of the FTC Safeguards Rule

#1: Appoint a Qualified Individual

Every dealership must designate a qualified person to oversee their information security program. This individual is responsible for ensuring that all safeguards are implemented effectively and remain up to date.

#2: Conduct Regular Risk Assessments

Risk assessments are critical. Dealerships need to evaluate their networks for vulnerabilities and potential threats. This includes conducting network vulnerability assessments to identify weaknesses that hackers could exploit.

#3: Develop a Written Security Program

A written information security program (WISP) must be developed. This document outlines safeguards designed to mitigate risks to customer data and ensures a consistent approach to data protection.

#4: Encrypt Customer Information

Customer data must be encrypted both in transit and at rest to prevent unauthorized access. Encryption adds an additional layer of protection for sensitive financial and personal information.

#5: Use Multifactor Authentication (MFA)

Multifactor authentication or an equivalent method is required to secure access to systems containing customer information. MFA adds a critical barrier, reducing the risk of unauthorized access through compromised credentials.

#6: Review Access Controls

Restrict and monitor access to sensitive information. Not every employee needs full access, and dealerships must ensure that only authorized personnel can view or handle sensitive data.

#7: Perform Regular Testing

Annual penetration testing and twice-yearly vulnerability assessments are essential to identify and fix security gaps before cybercriminals exploit them.

#8: Monitor Service Providers

Dealerships must also evaluate the security practices of third-party vendors. Service providers with weak security measures could be an entry point for hackers.

#9: Create an Incident Response Plan

Having a clear, actionable incident response plan is crucial. In the event of a cyberattack, dealerships need to communicate with customers, stakeholders, and regulatory bodies in a timely and transparent manner.

#10: Provide Annual Reports to Management

Management must receive an annual written report detailing the effectiveness of the dealership’s security program, ensuring accountability at the highest levels of the organization.

Why Compliance Matters for Western New York

Auto dealerships in Western New York are attractive targets for cybercriminals due to the large volume of sensitive data they handle daily. In recent years, hackers have increasingly focused on auto dealers, seeking to exploit vulnerabilities for financial gain. Non-compliance with the Safeguards Rule not only risks regulatory fines but also reputational damage that can have long-term impacts on a business’s success.

Staying compliant is especially important as state-level data protection laws can vary significantly. While New York’s laws focus on customer data security, states like California have broader protections covering additional types of personal information. Dealerships in New York must navigate these nuances to avoid penalties and safeguard their customers’ trust.

Partnering with MVP Network Consulting for Compliance

Navigating these regulations can be overwhelming, but Western New York car dealerships don’t have to go it alone. MVP Network Consulting specializes in cybersecurity and compliance solutions tailored to local businesses. From conducting network vulnerability assessments to implementing encryption and multifactor authentication, MVP ensures that your dealership not only meets but exceeds the FTC’s standards.

Protecting your dealership and your customers starts with a proactive approach. Contact MVP Network Consulting today to ensure your business is secure, compliant, and ready to thrive in the evolving regulatory landscape.