New proposed regulations will force small businesses to ramp up their IT spending, whether they want to or not.
The biggest costs will come from necessary upgrades to their systems and their hardware in a bid to secure information and keep hackers. This has worked well for the large companies and the IRS.
These regulations are especially targeted to firms in industries such as health care and finance, and for those that want contra cts with larger companies that seek vendor compliance with tougher security rules.
Smaller firms are increasingly at risk of lawsuits that could ruin them. So it is believed that they will spend thousands on security to try to avoid million-dollar judgments that could stem from system breaches. Most large firms have already upgraded. It is believed that a crackdown on shoddy data security practices is coming from the Federal Trade Commission (FTC).
A recent court ruling regarding the FDC gave the agency more ammunition to fight inadequate security measures to protect sensitive private data; including credit card and Social Security numbers.
Also, to address any misleading claims about the level of security a company employs, in regards to promising, but not quite delivering on claims that a company encrypts data to protect its customers.
In light of the scrutiny, this is a good time for firms to review their security steps. Remember the Internal Revenue Service is in more hot water with lawmakers, now that it’s announced that the cyberattack on its tax system affected more taxpayers than first reported.
In May, the agency said that tax information on 100,000 or so filers was stolen when hackers used IRS’s “Get Transcript” Web tool to gain access to taxpayer data. It now says that 220,000 additional folks may have been victimized by this breach.
As before, the agency will notify the affected taxpayers, pay for credit monitoring and give victims the opportunity to apply for special identity protection ID numbers. Which is worthless, since this will only protect them from further tax refund attacks. With the information collected identity theft is a greater concern than tax fraud at this point.