FTC Safeguards Rule Compliance for Small Financial Firms

If you prepare taxes, broker mortgages or arrange consumer financing, the FTC expects a written security program and proof it works.

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The FTC Safeguards Rule (16 CFR Part 314) requires non-bank financial institutions, such as tax preparers, mortgage brokers, consumer lenders and auto dealers that arrange financing, to keep a written information security program. That means naming a Qualified Individual to run it, doing a written risk assessment, enforcing multi-factor authentication and encryption, testing through continuous monitoring or regular penetration tests and vulnerability scans, training staff, overseeing vendors, keeping an incident response plan, and reporting to leadership at least yearly. Since May 2024, a breach affecting 500 or more consumers must also be reported to the FTC within 30 days. TechFort builds and runs that program for small firms.

What the rule asks for

A Qualified Individual who oversees the program. It can be an outside provider, but you keep responsibility.
A written risk assessment and safeguards that answer it: access controls, encryption, multi-factor authentication, secure disposal.
Testing: continuous monitoring, or a yearly penetration test with vulnerability assessments every six months.
Staff security awareness and oversight of the service providers who handle customer data.
A written incident response plan, and notice to the FTC within 30 days for a breach of unencrypted data on 500 or more consumers.
A written report to your owners or board at least once a year.

Firms holding data on fewer than 5,000 consumers are excused from some of these, including the written risk assessment, the testing schedule, the incident response plan and the yearly report. Multi-factor authentication and encryption still apply. Check the current rule text or your attorney for exactly where your firm falls.

How we build it

1 · Remediate. Auditors compare your written policy with what they find, and any gap becomes the finding. So we close the known gaps first: public file links, too many admins, sign-in protection that is on but not enforced, unsigned email, unapproved apps with broad access.
2 · Document. A risk assessment, an information security policy, an AI usage policy, an incident response plan and a business continuity plan, written to match how you actually work, not a template.
3 · Test. Vulnerability scans, a realistic penetration test, AI-driven attack testing and a phishing simulation, with a formal report, the fixes made and a retest.
4 · Maintain. Security awareness lessons, monthly phishing tests, quarterly scans and risk reports, a yearly tabletop exercise and a yearly policy refresh.

Who does the work

Christian Ririe leads every compliance engagement personally. He spent 15 years at the World Bank, where he worked with its Internal Audit department on the yearly audits, testing servers and systems for vulnerabilities. We test to the public NIST SP 800-115 guide and OWASP testing methods.

We use AI to draft, scan and test, and every deliverable is reviewed, tailored and owned by TechFort. That is how a small firm gets a complete program at a fraction of what it usually costs.

Straight answers

Common Questions

Can TechFort be our Qualified Individual?

Yes. The rule allows the Qualified Individual to work for a service provider. You keep responsibility for the program, and you need to oversee the provider, so we report to you in writing and you sign off on the program.

Are we covered by the Safeguards Rule?

If you are a non-bank business that provides financial products or services to consumers, such as tax preparation, mortgage brokering, consumer lending or arranging auto financing, you very likely are. Your attorney or accountant can confirm. We can walk you through the common cases on a short call.

What does the FTC breach notice require?

Since May 13, 2024, if unencrypted customer information on 500 or more consumers is acquired without authorization, you must notify the FTC as soon as possible and no later than 30 days after discovery. Your incident response plan should say who files it and how.