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 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.
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.
The FTC sent warning letters to 24 large healthcare services companies, cautioning that incomplete, inaccurate, or untimely pricing information for scheduled medical care may be unfair or deceptive. The letters urge recipients to review their price-disclosure practices and take corrective action; they announce no fine or formal order.
$1.9M
The FTC alleged that Premier Franchising Group LLC and Franchise Fastlane LLC made deceptive and unsubstantiated claims about the Premier Martial Arts franchise opportunity and violated the Franchise Rule. The proposed settlements require the companies to pay a combined $1.85 million to compensate franchisees, prohibit certain misrepresentations, and require Franchise Rule compliance; certain franchisees may also cancel their agreements without penalty.
The FTC, Utah, and Nevada sued Lens.com Inc., alleging that it advertised artificially low contact lens prices while hiding mandatory checkout charges and misleading consumers about its AutoRefill subscription. The complaint seeks to stop the alleged practices; the court has not yet decided the case, and no penalty or remedy has been imposed.