August 21, 2025
Why Small Businesses Must Pay Attention to the FTC Safeguards Rule
In 2025, the FTC's Safeguards Rule is no longer just a concern for big financial firms it's a direct responsibility for many small businesses, especially those handling consumer financial information. If your business touches any financial data—from tax prep to car loans, you may fall under the revised requirements.
Many small businesses don't realize they're subject to the Gramm-Leach-Bliley Act (GLBA). Under the FTC's 2021 amendments (enforced more rigorously as of 2023 and refined for 2025), the rule now requires much stricter cybersecurity controls. Failure to comply could mean steep fines, lawsuits, and reputational damage.
If you're in auto sales, accounting, financial advising, mortgage services, or even some manufacturing scenarios with embedded financing, read on. Your business likely needs to act now.
What Is the FTC Safeguards Rule?
The FTC Safeguards Rule is part of the GLBA, which mandates that covered businesses must protect the confidentiality and integrity of customer financial data. The FTC updated this rule to reflect the reality of today's cybersecurity landscape: more sophisticated threats, and more at stake.
What's New for 2025?
While initial enforcement began in 2023, the FTC added new clarifications and enforcement priorities in 2025, including:
- Greater scrutiny of "qualified individuals" overseeing data security programs
- Stricter MFA enforcement (multi-factor authentication is now non-negotiable)
- Clarified vendor management requirements, especially for IT providers
- More emphasis on incident response planning and testing
Does the FTC Safeguards Rule Apply to My Business?
You may be subject to the rule if your business falls under the FTC's broad "financial institutions" definition. This includes:
- Tax preparers and accountants
- Auto dealerships that offer financing
- Mortgage brokers
- Finance companies
- Credit counseling services
- Insurance claim processors
- Any business that stores or processes consumer financial information
If you're unsure, it's best to consult a cybersecurity partner that understands compliance in your industry.
What Does Compliance Look Like?
You're required to implement a written information security program (WISP) with specific controls. These aren't vague suggestions—they're mandatory components.
Core Requirements of the FTC Safeguards Rule:
- Appoint a qualified individual to oversee security
- Conduct a risk assessment and document findings
- Implement access controls and user monitoring
- Use multi-factor authentication (MFA) across sensitive systems
- Encrypt customer data at rest and in transit
- Train employees on security awareness
- Regularly test or monitor your systems
- Maintain a written incident response plan
- Oversee third-party vendors' security practices
- Keep your program up to date based on evolving threats
Managed IT services tip: Even small businesses need a formal plan. "Informal" won't fly with auditors anymore. And yes, you can be audited.
Why Small Businesses Are at Risk in 2025
The FTC is paying closer attention to smaller, locally operated firms, especially as attackers continue targeting them with ransomware and phishing scams. Too often, SMBs believe they're "too small" to be worth a hacker's time.
That's no longer true, and it's one reason why enforcement of the Safeguards Rule is tightening. Regulators know that one weak vendor can compromise an entire supply chain.
At Tomorrow's Technology Today, we've seen firsthand how overwhelmed small businesses can get trying to interpret compliance rules. That's why we help companies in Ohio, Indiana, and beyond create realistic roadmaps to stay compliant without breaking their budget.
What Happens If You Ignore the Rule?
The consequences of non-compliance can be severe. In 2023 alone, the FTC imposed penalties on several businesses big and small for failing to implement basic security measures.
FTC penalties may include:
- Civil fines
- Lawsuits from impacted customers
- Increased insurance premiums or coverage denial
- Business disruptions during investigations
- Lasting reputational harm
In some cases, a single breach could be enough to shutter a small company.
Practical Steps for Small Business Compliance in 2025
You don't need a Fortune 500 IT budget to meet the rule's standards. Here's where to start:
7-Step Roadmap to FTC Safeguards Rule Compliance
- Step 1: Appoint a security lead (internal or via an MSP)
- Step 2: Conduct a cybersecurity risk assessment
- Step 3: Implement MFA on all sensitive systems
- Step 4: Review who has access to customer data and why
- Step 5: Encrypt data both in transit and at rest
- Step 6: Train your team on security awareness
- Step 7: Write and test your incident response plan
Working with a managed IT partner like Tomorrow's Technology Today ensures these steps are done right without overcomplicating your operations.
Why Work With Tomorrow's Technology Today?
Compliance is only one piece of the puzzle. At Tomorrow's Technology Today, we combine local expertise, CJIS-certified support, and a deep understanding of regulated industries to deliver IT solutions that are secure, clear, and cost-effective.
Whether you need help building your WISP, implementing MFA, or conducting a risk assessment, we're here to help with no confusing jargon or surprise fees.
Why Businesses Choose Us:
- Local team, no outsourcing
- 60-minute guaranteed response
- Live, plain-English support
- Tailored compliance roadmaps
- Deep experience with auto dealerships, municipalities, and manufacturers
Ready to Make Sure You're Compliant?
Don't leave your business exposed to fines, breaches, or reputational harm.
Click Here or give us a call at 419-678-2083 to Book a FREE 10-Minute Discovery Call and find out where your vulnerabilities are and how to fix them before it's too late.
Key Takeaways
- The FTC Safeguards Rule applies to many small businesses, not just large financial institutions.
- Compliance is mandatory and includes detailed cybersecurity and data protection measures.
- Small businesses in Ohio and Indiana are increasingly under scrutiny, especially those in auto sales and financial services.
- Non-compliance can result in serious penalties, including fines, lawsuits, and data breaches.
- Partnering with a proactive IT provider like Tomorrow's Technology Today simplifies the process and ensures you meet every requirement with confidence.
