The Federal Trade Commission ("FTC") released a new guidance entitled "Start with Security," intended to assist businesses in improving their data security practices. Stemming from "basic, fundamental security missteps" identified by the FTC through the more than fifty FTC data security enforcement actions, this suggested guidance provides valuable insight into the issues of concern to the FTC and, therefore, warrants consideration of businesses that may face regulatory scrutiny. 

The guidance is distilled into "ten lessons to learn that touch on vulnerabilities that could affect your company, along with practical guidance on how to reduce the risks they pose."

  1. Start with security:  Businesses should factor security into the decision-making in every aspect of the business. In starting with security, consider: (A) not collecting personal information unless there is a legitimate business need; B) holding on to information only as long as there is a legitimate business need; and (C) not using personal information when it is not necessary.
  2. Control access to data sensibly:  If there is a legitimate business need to hold on to sensitive data, businesses should put controls in place to make sure employees have access only on a "need to know basis."  Restricting access to sensitive data and limiting administrative access to only those who "need to know" reduces the number of penetration points available to potential hackers.
  3. Require secure passwords and authentication:  Businesses should: (A) put in place strong authentication procedures, including requiring complex and unique passwords; (B) secure storage of passwords; (C) implement a policy to suspend or disable accounts after repeated login attempts; and (D) regularly test for known vulnerabilities that can be exploited to circumvent authentication requirements.
  4. Store sensitive personal information securely and protect it during transmission:  Businesses should use cryptography to secure confidential material during storage and transmission as well as follow industry tested and accepted methods when storing and transmitting information.
  5. Segment your network and monitor who is trying to get in and out:  Businesses should utilize tools like firewalls to segment their network, thereby limiting access between computers on the network and between computers and the Internet.
  6. Secure remote access to your network:  When developing a remote access policy, businesses should ensure endpoint security (firewalls and updated antivirus software) is in place on all devices with remote access to their network.  Businesses should also limit third party access to their network – for example, by restricting connections to specified IP addresses or granting temporary, limited access.
  7. Apply sound security practices when developing new products:  Businesses should: (A) train their engineers in secure coding; (B) follow platform guides for security and ensure best practices are followed; (C) verify that privacy and security features work; and (D) test for commonly-known vulnerabilities.
  8. Make sure your service providers implement reasonable security measures:  Businesses should keep a watchful eye on their service provider and take reasonable steps to ensure that the provider that is able to implement appropriate security measures. Specifically, the FTC recommends that businesses put in writing contract provisions that require service providers to adopt reasonable security precautions and always verify compliance.
  9. Put procedures in place to keep your security current and address vulnerabilities that may arise:  Businesses should maintain reasonable data security procedures that ensure that third-party anti-virus are always up to date. Additionally, businesses should have a process for receiving and promptly addressing reports about security vulnerabilities.
  10. Secure paper, physical media, and devices:  Businesses should take steps to ensure the security of paperwork and physical media like hard drives and laptops. Recommended steps include: (A) storing sensitive files in a secure location; (B) protecting devices that process personal information; (C) maintaining safety standards when data is transported; and (D) disposing of sensitive data securely.

On May 7, 2015, Troutman Sanders released an advisory following the issuance of a Cyber-Security and Data Breach Best Practices guidance by Department of Justice which recommended steps to plan for and respond to a data breach. A link to that advisory can be found here. Read together, the FTC's and the DOJ's guidance provide helpful recommendations for preventing, planning for and responding to a data breach.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.