The civil monetary penalties the FTC can assess against financial institutions that fail to maintain a compliant information security program.
FTC Safeguards Rule penalties are civil monetary fines the Federal Trade Commission can assess against financial institutions, including CPA firms and tax preparers, that fail to comply with 16 CFR Part 314. The current statutory maximum is $53,088 per violation per day, adjusted annually for inflation. In addition to monetary penalties, the FTC can impose consent orders requiring outside compliance audits, third-party assessments, and ongoing reporting that typically last 10 to 20 years. Individual officers and directors can also face personal liability under FTC Act Section 5.
Per-violation calculations multiply quickly. A breach affecting 1,000 client records, treated as 1,000 violations, would expose a small firm to potential exposure well into eight figures. Even short of a breach, an FTC inquiry that finds a missing WISP or undesignated Qualified Individual can trigger a consent order. Cyber insurance often excludes coverage for regulatory fines, leaving the firm to absorb them directly.
The 58-Control Register module handles this for your firm, personalized to your software, team size, and state requirements.
See plans and pricingA federal regulation requiring financial institutions, including tax preparers, to develop and maintain a comprehensive information security program.
A documented set of policies and procedures describing how your firm protects sensitive client data.
The person designated to oversee and be accountable for your firm's information security program, as required by the FTC Safeguards Rule.
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