LAS VEGAS — As financial institutions and dealers become more tech savvy, lenders should expect greater scrutiny from the Federal Trade Commission, said FTC Attorney Colin Hector.
“A lot of the FTC’s recent activity in the auto finance space has involved enforcement actions against auto dealers,” Hector said. “Some of those enforcement actions may have implications for auto financing companies, especially if you have a conglomerate situation where there are auto financing companies working hand in hand with auto dealers.”
Dealers have been the focus of enforcement in regards to false advertising, spot delivery, and yo-yo financing, but lenders can get caught in the middle as well, he said. He added that the transfer of secure, private data is a focus of the agency across the board, but with more tech startups entering the auto space, the FTC will certainly be keeping a closer eye.
“We have a division of privacy information security and that’s something that has [implications] for companies that accept financial data, whether that’s in the context of auto or otherwise,” Hector said.
Big data is also being used more frequently in the auto space, and he said companies need to be cognizant of how they are protecting that data every step of the way.
“It’s important to use information security with respect to the entire lifecycle of information,” Hector said. “From the moment you are obtaining information, how that information is stored, what a company is doing with the information, and finally how that information is exposed of.”
