The compliance regulation landscape in the United States is fragmented, with a handful of federal data privacy regulations affecting specific industries. Those regulations are supplemented by a patchwork of state laws.
Industry regulations like the Health Insurance Portability & Accountability Act (HIPAA), which governs the disclosure of health information, or the Family Educational Rights and Privacy Act (FERPA), which governs educational records, are among the regulations that cover businesses and organizations that deal with certain types of personal information.
Meanwhile, statewide regulations like the California Consumer Privacy Act are more far-reaching, requiring businesses with customers in that state to give their users certain rights, such as knowing what information they collect and allowing them to opt out of sharing that information.
The number of comprehensive state privacy laws is increasing, meaning more regulation is likely. More comprehensive regulation could also come at the federal level in the future. While not all businesses face current government regulation, becoming compliance ready is a smart strategy as the landscape continues to evolve and more regulations become law.
Maintaining compliance may mean spending additional money to put proper measures and safeguards in place, but this cost should be considered an investment. That’s because it helps set your business up for success while avoiding some of the costs associated with a data breach.
Here’s a look at the potential costs to businesses that don’t comply.
Failure to follow state or federal regulations could result in a financial penalty if a business suffers a data breach. Different federal and state laws will have differing levels of fines and different criteria for determining the amount to be assessed.
If businesses don’t face fines, they could face financial damage in other forms, such as costly lawsuits. For example, the wide-ranging 2017 Equifax data breach resulted in multiple lawsuits and a settlement that cost the company at least $575 million.
While harder to quantify, the loss of reputation is a major impact of a data breach. Consumers put trust in businesses that handle their data, and a breach in that trust will hurt their loyalty to your company.
In a survey released by Cyberint this year, 60% of consumers said they would probably stop shopping with a retailer if it suffered a data breach. And 77% of consumers say they factor a business’s ability to keep their information safe into their buying decisions, according to an IBM survey.
The wide-ranging impact of a data breach also includes costs like the notification of impacted consumers, loss of business due to an attack, or negotiation or ransom payments in the event of a ransomware attack. While cybersecurity insurance can help with these costs, these expenses can add up quickly for businesses that do not have enough coverage.
Many other states have passed narrower laws affecting certain industries. Resources that can help you understand what laws affect your industry include:
There are also many specific actions you can take now to follow best practices, such as:
Working with a trusted cybersecurity company like 12 Points Technologies can help you navigate the best steps to take to strengthen your cybersecurity defenses.
The team at 12 Points Technologies is ready to partner with your business to put you on the path to cybersecurity success. We’re well-versed in the latest data privacy regulations and compliance needs for a range of businesses and are ready to come alongside you as your expert cybersecurity consultant.
Our team takes a security-first approach and is also ready to partner with you to provide many compliance-centered services including:
Contact 12 Points Technologies today and let’s talk about what we can do for you!
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