Today, we all are at risk of cybercrime, which can happen at any time. With the rapid growth of digital advancements, this problem is on the rise, with an uncountable number of people and organizations getting subjected to cyber theft in their professional domain. According to the FTC, the total amount of money lost in the USA due to identity fraud was around $5.8 billion in 2021.
While individuals are being targeted for identity theft, businesses are also the soft target and can be the easy victims of ID fraud. Therefore, organizations need to comply with data compliance; otherwise, they can be fined in case of a data breach.
Data compliance meaning
Data use compliance specifically refers to the standards designed for various organizations to keep data secure, private, and safe from breach or damage. It can be consumer data or even employee data, financial records, and any other information.
A company is termed compliant when it effectively manages, stores, and transmits data according to the regulations laid out under a series of laws and standards.
Why are data compliance laws important?
Data compliance laws are designed to protect consumers, employees, and businesses. These compliance help keep data secure from breaches and improper use. Businesses that remain compliant, apart from staying on the right side of the law, also ensure a streamlined data management framework, further improving the credibility of their organization.
A business must know which data compliance regulations are necessary so as to avoid penalties. To remain compliant, effective and timely data destruction is a good practice. You can search for a reputable data destruction company on the website of USA Shredding Services, which is a trusted document destruction provider.
Some of the noticeable data security and privacy regulations are explained as under:
- General Data Protection Regulation: The GDPR is a comprehensive set of guidelines that sets different levels of personal data protection. Some data like health, biometrics, genetics, and criminal history needs to be protected with the highest level of security. GDPR applies to all companies, no matter their location and size, and includes data compliance for:
- Biometric data
- Identification numbers like National Identification Numbers, passport numbers, etc.
- IP addresses
- Telephone numbers
Fine for non-compliance with GDPR is based on a tiered system and can go up to 4% of the company’s turnover or 20 million Euros, whichever is higher.
- Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule: This federal rule is designed to protect Americans’ personal data, especially in the form of medical records or any personal health information. It specifically safeguards patient information for healthcare providers and companies involved in managing health plans.
Healthcare information is vulnerable and can be wrongly used to buy fraudulent prescriptions and to make fake medical insurance claims.
HIPPA’s privacy rule also follows a tiered system of fines, with a maximum possible fine of $1.5 million per year. Moreover, HIPAA violations can result in paying fines or agreeing to a settlement. An example of a massive settlement in 2021 is of Excellus Health Plan, where the company agreed to pay $5.1 million as a settlement for a data breach.
- California Privacy Rights Act: CPRA is for Californian residents only and provides citizens the right to:
- Know what information a company can collect and how it will be used
- Can opt-out to the sale of their data and vice versa
- Can demand to delete the information collected
- Limit the usage of their information
- Sue a company for a data breach
Under this act, the state fines based on a tier system or may call for civil penalties for non-compliance.
- Federal Trade Commission Act: FTC prosecutes businesses for unfair or deceptive acts or practices, including apps or websites containing misleading information on privacy and security. FTC applies to all US companies regardless of industry type and ensures a wide range of consumer protections.
The FTC levies fine the companies not complying with its regulations and continue to fine them till the problem is fixed. The most recent fine by FTC was in 2021 when it ordered e-commerce giant Amazon to pay around $61 million as a settlement fee for its failure to pay Amazon Flex drivers their tips from Amazon customers, as promised earlier.
- Payment Card Industry Data Security Standard: PCI DSS is designed for businesses dealing with customers’ financial information and is a vital part of any compliance process. It has set guidelines regarding how companies should handle and protect cardholder data, such as credit card numbers.
A company found to be non-compliant with PCI DSS rules may face heavy fines and even undergo relationships with banks terminated.
If you want to improve your data compliance practices, start by understanding which compliance laws apply to your business, and then make a foolproof plan to remain compliant. The three key areas where you should focus on staying compliant are:
- Know the kind of data you have
- Design a data compliance plan
- Perform data assessment at regular intervals
Moreover, outsourcing your data destruction is always a good practice. You can take the help of USA Shredding Services, which can connect you with secure shredding companies to help destroy your data in any form, including paper documents, old laptops, hard drives, and other electronic media.