The FTC extended the compliance deadline for certain provisions of the Safeguards Rule by six months to June 9, 2023, due to challenges like shortage of qualified personnel and supply chain issues exacerbated by the COVID-19 pandemic. The rule requires non-banking financial institutions to implement enhanced data security measures, and the extension aims to facilitate compliance, especially for small entities.
In-house legal teams should review vendor agreements, customer contracts, and employee data handling policies to ensure they incorporate requirements from the Safeguards Rule under the Gramm-Leach-Bliley Act. Specifically, clauses related to data security programs, risk assessments, access controls, encryption, incident response, and vendor management must be updated to mandate compliance with the Rule. Contracts should include audit rights to verify security practices, breach notification obligations aligned with the Rule, and requirements for regular security training. For small entities, consider including provisions for phased implementation or deadline extensions to align with the June 2023 compliance date, and ensure indemnification clauses cover data security failures.
Entity
Financial institutions covered by the Safeguards Rule
Also known as: Financial Institutions
Industry
Financial ServicesOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2022/11/ftc-extends-deadline-six-months-compliance-some-changes-financial-data-security-rule
16 cfr part 314 standards safeguarding customer information
https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-314-standards-safeguarding-customer-information
concurring statement commissioner wilson regarding effective
https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/concurring-statement-commissioner-wilson-regarding-effective-date-certain-provisions-recently
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Financial institutions covered by the Safeguards Rule"
"Gramm-Leach-Bliley Act"
The FTC filed a complaint alleging that GovAssist LLC, Entry LLC, and Scott Zuckerman used deceptive paid search ads, misleading service and pricing claims, and fake reviews to deceive consumers seeking passport services. The complaint alleges violations of the FTC Act, the Impersonation Rule, and the Gramm-Leach-Bliley Act; the case will be decided by the court, and no penalty or remedy is reported as imposed.
The FTC issued its annual report to Congress describing fraud trends affecting older adults and the agency’s enforcement, education, and outreach efforts. The report is not a specific privacy enforcement action and announces no penalty or remedy.
The FTC referred a complaint against REPS & Company Inc. and company executives, alleging they bypassed ticket-issuer security controls and purchasing limits to acquire millions of tickets for resale. The complaint was filed by the Department of Justice, and the case will be decided by the court; the press release does not report a penalty or other remedy imposed.
$106.8M
A federal court entered a $106.8 million default judgment against corporate defendants in an alleged debt-relief scheme that impersonated banks and government entities and targeted seniors and veterans. The judgment permanently bans the defendants from the debt-relief industry and imposes additional prohibitions, including on impersonation, telemarketing, and misrepresentations.
The FTC sued Digital Forensics Corporation LLC and affiliated defendants, alleging they misled sextortion victims with promises of investigative and monitoring services that often were not provided, and used fake positive reviews. A federal court granted the FTC’s request to temporarily halt the defendants’ activities; the complaint remains for the court to decide.
The FTC alleged that Greenway Auto Group advertised vehicle prices thousands of dollars below the amounts consumers actually paid and used mailers falsely suggesting recipients had won cash prizes. Greenway agreed to an order requiring transparent pricing and prohibiting deceptive prize mailers and other misrepresentations; the press release does not state a monetary penalty.