Protection against privacy and data breaches, identity theft, and fraud isn’t just smart, it is the law.
Industry research indicates that small to medium sized alarm companies provide more personal, and in many cases, better service to the customer. If I asked you whether your service was very good, you would likely reply, “of course”.
Your office contains a large amount of customer information. It is primarily located in your computers, but it also exists in your accounting records, customer contracts, service and installation orders, sales documents and credit card data. This is not an exhaustive list, but you get the point. Do you know where all of this information is at any given moment? Probably not. Better yet, do you know where to find a piece of information on a customer, and is that information under your control?
You will quickly grasp that you and your employees are likely trying to manage your customer’s data without a clear plan to protect it from the bad guys, and YOU are the security experts! Candidly, some dealers do a good job of managing this information, but they have no way to share that achievement with their customers.
Our large commercial customers require us to meet stringent security criteria to be accepted by them. For those of us who service residential and small commercial clients, we need a template and protocols that will enable us to meet criteria, which demonstrates our concerns and capabilities to safely preserve our customers important information. This sounds a bit like the “Five Diamond” certification that our central stations pursue if they want our business. In a broader sense we are looking for the “Good Housekeeping Seal of Approval” to identify and validate our skills. Clearly, protecting against privacy and data breaches, identity theft, and fraud occurring through your business isn’t just smart, it is the law. The states are rapidly passing legislation to protect your customers and the federal government through the Federal Trade Commission (Red Flag Rules), Department of Health (HHS), Department of Commerce, and the Department of Justice are each seeking compliance with their rules.
If you answer yes to any of the following questions, you must comply with one or more of these state and federal laws:
- Do you collect, process, or store any personally identifiable information regarding your customers?
- Do you collect, process, or store any financial information about your customers?
- Do you collect, process, or store any health- related information (PERs services)?
- Do you collect, process, or store any personal information about your employees?
- Do you extend credit or payment terms to your customers?
- Do you provide products or services and then invoice your customers?
- Do you accept credit cards as a form of payment?
- Do you share customer information with any third parties (central stations)?
The above questions are all consuming. It is unlikely that you did not say yes to at least one of the above questions. It is important for the industry to take these rules seriously and develop the plans required for compliance. There needs to be a solution that takes care of everything in a simple, affordable service.
- We must protect against lost or stolen employee and customer information.
- We must seek compliance with information security and privacy laws, and regulations.
- We must avoid costly penalties and fines.
- We must build customer confidence, sales, and referrals.
Next month we will examine a possible solution to the issues raised above. However, it is very important that our industry recognize these issues that have developed because of our use of technology. Building security for the “Digital Front Door” is crucial, since we have already closed and locked the “Physical Front Door”.
Tony Smith is the founder and President of Security Funding Associates, a 20yr. Brokerage, and Advisory Services firm, located in Los Angeles CA. He is a licensed alarm dealer, past President of the CAA and former Board Member of ESA. Tsmith@securityfundingsolutions.com * (626) 795-9199
