Think your business is too small for federal cybersecurity regulations? Think again.
If you collect personal information — like names, addresses, Social Security numbers, credit reports, or even just driver’s licenses — the FTC Safeguards Rule might already apply to you. And ignoring it could cost you far more than compliance ever would.
Let’s cut through the legal noise and get real about what this means for your business.
“We use Microsoft/Google — they handle all our security.”
This is the most common (and dangerous) misconception we hear.
Yes, Microsoft 365 and Google Workspace have built-in security features — but they don’t meet the specific requirements of the FTC Safeguards Rule out of the box. Most businesses still need to configure, monitor, and back up their environments properly. And neither company is going to do a risk assessment or train your employees for you.
If your business is breached or audited, saying “we use Google” won’t protect you from penalties.
So… Who Does the FTC Safeguards Rule Apply To?
Originally written for financial institutions, the updated Safeguards Rule now applies to a wide range of non-banking businesses, including:
- Auto dealerships
- Mortgage brokers
- Tax preparers and CPA firms
- Real estate appraisers
- Investment advisors
- Insurance agencies
- Retailers offering financing
- Colleges and trade schools
But here’s the catch:
If you store or transmit consumer financial data — even indirectly — you’re likely on the hook.
What Does the Rule Require?
In plain English: the FTC wants you to protect consumer information the way you’d protect your own money.
Here’s a simplified breakdown of the key requirements:
- Designate a qualified individual to oversee your information security program
- Conduct a risk assessment to identify internal and external threats
- Implement safeguards (like access controls, encryption, and multi-factor authentication)
- Monitor and test those safeguards regularly
- Train your staff on security best practices
- Oversee third-party service providers and ensure they’re secure
- Keep it all documented — and update the plan as your business changes
If that sounds like a lot… it is. But that’s the point. Consumer data is serious business.
What Happens If You Don’t Comply?
Let’s be real — the FTC isn’t going door-to-door, but when something does go wrong (like a data breach, client complaint, or insurance audit), non-compliance can come back to bite hard.
Potential consequences include:
- Fines and legal fees
- Loss of cyber insurance coverage
- Damaged reputation and lost clients
- Costly cleanup and downtime
You don’t want to wait until something breaks to figure this out.
What Should You Do Next?
✅ Ask your IT provider: “Have we done a risk assessment for FTC Safeguards compliance?”
✅ If you don’t have IT — or if you got a vague answer — that’s your cue to get help.
✅ You can DIY some of this, but it’s easy to miss key details that could cost you later.
At Guardicloud, we specialize in helping small businesses understand their risks and stay compliant — without the fluff, jargon, or fear tactics.
Not sure where to start?
We offer a free 15-minute consultation — no pressure, no sales pitch. Just clear answers.
TL;DR
- If you handle personal or financial data, the FTC Safeguards Rule likely applies to you
- Microsoft/Google don’t make you compliant
- A risk assessment is the first step — and it’s easier than you think to get started