consultants and certain software providers may not be facilitating solutions to satisfy the encryption requirements for in transit exchange. This becomes particularly problematic when one considers, for example, the volume of personal data on a dealership salesperson’s phone from existing and past customers. This data might be located in a number of places, including without limitation, in the phone’s text history, photo bank, and other repositories, as well as data backed up to a cloud service which might be shared. Each item mentioned would constitute an incident under the FTC Safeguards Rule and a fineable offense, with the maximum fine, per incident, being $50,120. Moreover, the Safeguards Rule broadly covers both past and current dealership employees and past and current dealership customers, with authority granted to the FTC to investigate retroactively. Pursuant to the FTC’s enforcement authority in the course of such an investigation, it may subpoena dealership email, text and phone records, including directly from the dealership’s vendor providers. Dealers need to ensure their full compliance with the FTC Safeguards Rule. This includes having in place security measures designed to protect customer PII that is exchanged in transit. At a minimum, this requires using secure technology for email, text messages, passwords, logins, accounts, etc. Consultation with the dealership’s cybersecurity advisor or technology consultant and legal advisor is warranted to ensure the dealership is compliant in every respect with the FTC Safeguards Rule. 1. The FTC Safeguards Rule updated the Gramm-Leach-Bliley Act (GLBA) of 1999; and previously, the FTC had amended the Rule in the year 2021 to address current technology and expand guidance for businesses. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for over 38 years and represents the business interests of franchised motor vehicle dealers throughout Illinois. Formerly in-house legal counsel for the Illinois Automobile Dealers Association, she concentrates her private practice in the areas of dealership operations and compliance matters, transfers of ownership, mergers and acquisitions, franchise law, commercial real estate transfers, dealership employment and other areas impacting day-to-day dealership operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only and is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel.com, or at (217) 787-9782, ext. 1. Dealers need to ensure their full compliance with the FTC Safeguards Rule. 13 Illinois Automobile Dealer News
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