New Resource on FTC Safeguards Rule & How it Could Impact Your Business

May 26, 2022 | The Toy Association is advising members of a new resource from the Federal Trade Commission (FTC) that offers guidance on its revised Safeguards Rule. The rule covers “nonpublic personal information,” such as a consumer’s date of birth and social security number.

The rule was updated in December 2021 and requires financial institutions within the FTC’s jurisdiction to have measures in place to keep customer information secure. The most notable change to the rule is the broadened definition of a “financial institution,” which could impact some businesses in the play community.

If, for example, a business can be categorized as a “finder”—a company that brings together buyers and sellers before the parties themselves negotiate and complete a transaction— it may be subject to the Safeguards Rule. This also holds true for retailers that extend credit to consumers by issuing their own credit cards or businesses that regularly wire money directly (i.e., not through an intermediary such as PayPal or a bank) to and from consumers. “Financial institutions” that maintain customer information concerning fewer than 5,000 consumers have been exempt.

Companies seeking more details on these new guidelines and requirements can reference the FTC Safeguards Rule: What Your Business Needs to Know resource for more information.