In October 2023, the Federal Trade Commission (FTC) amended the Safeguards Rule, requiring non-banking financial institutions, including auto dealerships, to report data breaches affecting over 500 consumers within 30 days. This change underscores the need to protect sensitive customer data, especially when it comes to dealership document management.

Many dealerships still handle document scanning in-house, unaware of this practice's significant liability and security risks. The involvement of multiple staff members processing dealership documents containing personal information heightens the chances of a security breach, potentially leading to fines and reputational damage.

The Benefits of Outsourcing Dealership Document Management

The FTC's Safeguards Rule amendment highlights the critical need for secure document management in auto dealerships. In-house management poses substantial risks, whereas outsourcing to an FTC-compliant vendor provides a proactive, safe, and compliant solution, protecting sensitive customer information and minimizing liabilities.

  • Enhanced Security. Outsourcing to an FTC-complaint dealership document management company offers superior security. These companies implement multi-factor authentication and regular penetration testing to safeguard personal information backed by robust insurance policies. By leveraging these specialized services, dealerships can significantly reduce the risk of internal security breaches.
  • Regulatory Compliance. Dealership document management partners ensure compliance with all shredding and storage regulations, minimizing the risk of penalties. They meticulously handle the entire document lifecycle, from pickup to scanning, storage, and shredding, ensuring adherence to legal requirements.
  • Reduced Internal Liabilities. In-house dealership document management processes can expose you to internal liabilities. More personnel handling sensitive information increases the risk of mishandling or breaches. Outsourcing shifts the security responsibility to the partner, who securely transports, scans, stores, and shreds documents, reducing the likelihood of errors during audits.
  • Efficiency and Resource Optimization. Outsourcing saves dealerships time and resources. During audits, in-house processes require diverting staff to retrieve documents. Outsourcing delegates this task to the vendor, allowing dealership employees to concentrate on core duties. Digital storage also facilitates quick document retrieval, streamlining the audit process.