The FTC’s new Amendment Requires Financial Institutions to Report Security Breaches Within 30 Days

The Federal Trade Commission has recently enacted an amendment that mandates non-banking entities to notify the Federal Trade Commission of specific data breaches along with other security incidents.

This mandate requires the creation, execution, and upkeep of an extensive security policy to protect consumer data, and it applies to businesses including payday lenders, auto dealers, and mortgage brokers.

The Safeguards Rule, which required financial institutions to report security breaches found in their systems as soon as they occur, was recently amended by the federal government. Organizations must notify the Federal Trade Commission (FTC) “as soon as possible,” but no later than 30 days, of any security issue involving the information of 500 or more customers.

It has been made mandatory for organizations to report the FTC in case any malicious or unauthorized entity gains illicit access to unencrypted customer data. However, this requirement is only applicable if the data is encrypted and hackers have obtained access to the encryption keys.

From April 2024, the new regulation will go into effect 180 days after it is published in the Federal Register.

FTC further informs that following the discovery of a security i

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