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How You Can Keep Customer Data Safe

Posted by Chris Peterson | Jul 20, 2020


In today's data-driven world, small businesses often find themselves in possession of sensitive customer data. As the collection of data increases, customers grow more suspicious of the means and methods used to collect and store data. In response to this growing concern, we are seeing increased legislation pertaining to the collection, storage, and distribution of data. Laws like the California Consumer Protection Act continue to be enacted throughout the country, putting pressure on businesses to ensure that their practices comply. Failure to adhere to customer data standards and current legislation can result in a loss of goodwill and hefty fines. Here are a few ways you can protect the customer data your business collects. 

Create Clear Systems for Data Collection, Storage, Distribution, and Deletion

The most important thing you can do to protect your customers' data is to develop clear systems that outline the following steps:

  1. what data you collect
  2. how you collect the data
  3. where the data is stored
  4. who you share the information with 
  5. how you delete the data when you are no longer using it 

One common practice for developing these systems is data mapping. Data mapping  identifies how data moves through your business. Remember that “data” is a broad term. It can include everything from customers' names to their IP addresses and everything in between. Additionally, it is essential to outline policies and procedures for employees who handle customer data on company devices like cell phones and laptops.

Utilize Strong Passwords

Using strong passwords makes it more difficult for hackers to break into your system and steal your customers' confidential information. A strong password usually consists of a long combination of characters—letters, numbers, and symbols—in random or unique order.

Maintain Proper Firewalls

To maintain your security standards, it is critical to continuously update the firewalls and antivirus software used on your devices. Because of the rapid rate at which technology develops and becomes outdated, a company must diligently maintain its security systems to ensure maximum protection of the data it handles.

Encrypt the Data You Collect

Data encryption should be standard practice. A business must ensure that the mediums used to exchange information have encryption capabilities. Although many digital communication providers include data encryption, it is not yet implemented across the board. As a result, it is important to ensure that the software and tools used in your business are fully equipped with data encryption technology.

Communicate Your Procedures to Customers

One of the most overlooked steps is communicating your data collection procedures to your customers. The easiest way to do this is to create a privacy policy that explains your company's procedures. In addition to keeping your customers in the loop regarding your policies, having a privacy policy is also mandated by privacy laws that have been passed in recent years. 

Give Us a Call

Our firm is equipped to help you create and maintain systems that keep you legally compliant. If you are in the process of revamping your data collection systems, you do not have to do it alone. We are here to help you. Schedule a consultation with one of our experienced attorneys today.

About the Author

Chris Peterson

Chris Peterson is the owner of Peterson Law Group. He practices primarily in the areas of wills, trusts and estate planning; probate and trust administration; elder law; and business law. Chris is also the owner of Brazos 1031 Exchange Company.