Keeping Dealership Customer Data Safe: A Guide to Safeguards

In today’s digital age, automotive dealerships possess a large amount of consumer data that can include everything from personal information to financial details. This information must be safeguarded to protect both the dealership and the customers. The Gramm-Leach-Bliley Act (GLBA) Safeguards Rule is a standard set by the Federal Trade Commission (FTC) which requires organizations to create and maintain an information security program to protect consumer data. It also mandates that organizations must provide ongoing training to employees handling customer data.

Specifically, companies that engage in financial activities are bound by the GLBA or Graham-Leach-Bliley Act, which mandates that all financial institutions must comply with its criteria. The law defines financial activities broadly, including car financing, and as a result, many automotive dealerships are required to comply.

Staying up-to-date with the rules and regulations around protecting customer data is increasingly valuable to maintain consumer trust, avoid breaches, and remain compliant with federal laws.

Importance for Automotive, Powersports, and RV Dealerships

Automotive dealerships have access to a massive amount of customer data, including credit reports, social security numbers, driver’s license numbers, and more. All of this information should be kept safe for the protection of consumers, as many transactions and dealings with the dealership require sharing this information. Automotive dealerships are also required by law to implement comprehensive safeguards for customer data to avoid loss or misuse of data, which may lead to potential breaches or damage to their reputation.

In recent years, data breaches at automotive dealerships have spiked due to a deficiency in robust data security protocols. This is particularly problematic as data breaches can lead to legal repercussions and damage to the reputation of the dealership in question. The Safeguards Rule provides a framework for dealerships to oversee and bolster their data security defenses. This is particularly important for automotive dealerships as data has become an essential component of automotive marketing, holds valuable insights into customer preferences and behaviors, and is also subject to stricter privacy regulations.

Tie-In to Consumer Marketing

Proper handling of customer data is a key part of building customer relationships. When customer data is protected and used appropriately, it can result in excellent service and communication, ultimately building trust with the customer. As customers entrust dealerships with their information, showcasing an ability to safeguard information can further encourage customers to choose it over competitors. Consumers are much more likely to revisit a dealership where they feel their data is protected than one where it is not, or where a breach has already taken place. Properly protected dealer-customer data can also offer insight into marketable data segments.

The way dealerships handle customer data directly influences the success of their marketing strategies. To remain competitive, businesses, particularly automotive dealerships, must devise ways to use customer data ethically and transparently or risk losing consumer trust. A robust data privacy initiative, such as compliance with the Safeguards Rule, helps prevent data breaches and improves dealership advocacy. Enforcing data safeguards is a valuable asset when marketing to customers, as it acts as a key driver for maintaining customer trust and loyalty.

SOC 2 Type 2 Compliance and Safeguards

When choosing a marketing partner, it’s critical to think about the level of data security and protection that partner has. The highest type of data security is SOC 2 Type 2. This is a framework of security standards based on the five trust principles developed and maintained by the American Institute of Certified Public Accountants (AICPA): Security, Availability, Confidentiality, Processing Integrity, and Privacy. A SOC 2 audit is considered the most rigorous of control standards, since it ascertains whether a company can control and secure its processes over time. By working with a SOC 2 certified vendor, there are assurances that data is kept secure through the implementation of standardized controls as defined in the AICPA Trust Service Principles framework.

Partnering with Automotive Product Consultants

In summary, the rise of cyber threats requires that automotive dealerships become vigilant guardians of consumer data. The FTC’s Safeguards Rule together with SOC 2 Type 2 compliance requirements are necessary steps toward ensuring a comprehensive approach to data protection. With SOC 2 Type 2 designation, APC is uniquely qualified to help dealerships address these needs, and as a result, dealerships can increase consumer trust, safeguard critical data and offer value of data privacy in their overall customer communication and marketing practices.

Automotive Product Consultants is a leading provider of post-sale vehicle service contract marketing for the automotive industry – an ideal partner for dealerships looking to achieve the Safeguards Rule’s ideal protection for customer data.  APC has earned SOC 2 Type 2 certification for its entire suite of services and is invested in client privacy as well as robust data protection. This achievement further validates APC as a trusted and secure partner for its users and their data assets.

At Automotive Product Consultants, we offer automotive, RV, and powersports post-sale marketing programs at no-cost to dealers. These programs market to your customers and educate them about the benefits of buying additional coverage from your dealership.

We encourage dealers and agents to contact us to learn how Automotive Product Consultants can power a post-sale vehicle marketing program that will drive sales and revenue for your dealership. Reach out to us today for a free program demo.

"*" indicates required fields

Did you know that more than 10 million electric vehicles are on the road worldwide today? To put this into perspective, that figure was only 53,000 in 2012, representing a massive 18,000% growth in the EV market. As the EV market continues to thrive, exploring the benefits of vehicle service contract coverage, the costs associated with electric vehicle repairs, and the unique technical requirements of these environmentally friendly vehicles is essential.