The IT Technical Requirements That Keep Your Dealership Compliant

In the world of automotive dealerships, customer information is among the most sensitive data collected by any business. With comprehensive financing details, personal identification information, and other sensitive data flowing through dealership systems, robust IT technical safeguards aren’t just good practice—they’re mandated by law.

it technical requirements for dealers to comply with FTC safeguards rules

Step 8 of Privacy and Safeguards compliance focuses on the technical requirements your dealership must implement to protect customer information. These aren’t optional suggestions; they’re essential components of your compliance program that can significantly reduce your risk of data breaches and regulatory penalties.

The Big Three Technical Requirements

The Safeguards Rule mandates three key technical measures that must be in place across all systems containing customer information:

Encryption

All systems that store or transmit customer information must implement encryption. This includes not only your dealership’s internal networks and databases but also the systems of any vendors that handle customer data on your behalf.

Encryption transforms sensitive information into an unreadable format that requires a decryption key to access. Even if unauthorized parties gain access to your data, encryption renders it useless without the corresponding key.

Multi-Factor Authentication

Simple passwords are no longer sufficient to protect sensitive systems. The Safeguards Rule requires implementing multi-factor authentication for all systems containing customer information.

Multi-factor authentication verifies a user’s identity through multiple methods beyond just a username and password. This typically includes something the user knows (password), plus something they have (like a smartphone that receives a verification code) or something they are (biometric verification like a fingerprint). This additional layer of security significantly reduces the risk of unauthorized access, even if credentials are compromised.

Continuous Monitoring or Regular Testing

Organizations must implement one of two approaches to system security verification:

Continuous monitoring: Real-time, 24/7 surveillance of systems to detect potential intrusions or vulnerabilities as they occur
Regular testing: If continuous monitoring isn’t feasible, organizations must conduct:
- Annual penetration testing
- Vulnerability assessments at least every six months

Penetration testing involves ethical hackers attempting to breach your systems to identify weaknesses before malicious actors can exploit them. Vulnerability scanning identifies potential security gaps in your infrastructure that could be exploited.

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Why These Requirements Matter

The technical requirements mandated by the Safeguards Rule aren’t arbitrary—they significantly reduce your risk exposure. When properly implemented, encryption and multi-factor authentication dramatically lower the likelihood of successful data breaches.

Consider this: if your systems are compromised but your data is properly encrypted, the stolen information remains protected. Similarly, multi-factor authentication prevents attackers from using stolen credentials to access your systems.

Continuous monitoring or regular testing ensures you identify and address vulnerabilities before they can be exploited. This proactive approach to security is far more effective than responding after a breach has occurred.

How KPA Helps Dealers Meet IT Technical Requirements

KPA understands that implementing these technical requirements can be challenging for dealerships that may not have dedicated IT security personnel. That’s why our Vera Suite Privacy and Safeguards solution provides comprehensive support for Step 8 compliance.

KPA offers vulnerability scanning and penetration testing tools as part of our programs. For dealers seeking continuous monitoring solutions, we provide options that combine advanced technology with expert oversight to deliver 24/7 protection. We also offer multi-factor authentication solutions that integrate seamlessly with your existing systems.

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Our team works with your qualified information security personnel to ensure these technical safeguards are properly implemented, regularly tested, and continuously improved. We help you develop a comprehensive security strategy that not only meets regulatory requirements but also provides genuine protection for your business and customers.

The consequences of inadequate technical safeguards can be severe, from regulatory penalties to reputational damage and customer lawsuits. By partnering with KPA, you can ensure your dealership implements robust technical safeguards that meet regulatory requirements while providing real protection for your sensitive data.

Don’t leave your dealership’s data security to chance. Implement the technical requirements outlined in Step 8 of the Safeguards Rule with the support of KPA’s expert team and comprehensive solutions.

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Beyond Passwords: The IT Technical Requirements That Keep Your Dealership Compliant