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It's a sad reality that your health and financial information is out there for all to see. It's even sadder that many people don't realize that it's being collected, or how much of an impact it can have on them in the future. This article from Vayle information security canada will show you how to avoid legal and financial risks through data privacy.

What is data privacy?

Data privacy is the legal protection of personal information. It's not just about what happens in the office; it's also about how you keep confidential customer records safe and secure.

The first thing you need to know is that when companies collect your personal data they are allowed to use it in any way they see fit. They can sell it, pass it along to other companies, or anything else they want as long as it doesn't violate any laws. When companies collect data about you they need to make sure that the information will be used for a legitimate purpose and not for any illegal purposes like fraud or identity theft.

When does data privacy matter?

Companies must protect customer records from unauthorized access, disclosure, or destruction. So, for example, if your business loses or damages a customer's credit card number or bank account information, that could be considered a breach of their right to privacy under federal law.

You should also know that there are laws against using personal information from websites without permission from the person who supplied the information. For example, if someone gave their home address on a form at work but never told their employer where they lived then this would be considered an illegal use of their name and address by the company that took their information without permission from them.

If you are a business owner, you should be aware of the risks associated with data privacy. You must ensure that your organization has the appropriate policies in place to protect the privacy and confidentiality of your customers' information.

Legal and Financial Risks

In today’s economy, it is more important than ever for businesses to safeguard customer data and protect against cyber attacks. As technology advances, so does the threat of data breaches. There are many financial and legal risks associated with data privacy that can affect your business. For example:

Theft of customer information

A customer may be required to provide his or her credit card number for purchase, but you may not want to store this information on your server. If a hacker were able to gain access to such personal information, he could potentially use it for his own benefit at no cost to you. Hackers can use stolen personal information to commit fraud or identity theft. They can also use this information for illegal activities like stealing money from an account or harassing someone online.

Digital footprints

Someone can find out everything about you through the internet. Even if they don't know what or who you are, they will still be able to learn something about you by searching for your name or email address in public databases like Facebook or LinkedIn.

Liability issues

If someone were injured as a result of misuse of customer information, you could be held liable for any damages that are caused by improper use of this data. In addition, if you do not inform customers when they become aware of unauthorized access, they will have no way of proving that their personal information was compromised and they could lose confidence in your company's ability to protect their personal information from theft or misuse by third parties.

Private entities

Private entities often require people to provide their personal details in order for them to offer services like loans or insurance policies. But these entities have no legal rights over these details unless they have signed a contract with the person providing the details and agreed on how they will use them.

Legal risks

It is illegal in many countries around the world to share personal information without explicit consent from the user concerned. If someone else gets access to your data without your consent and uses it inappropriately, there may be legal consequences in some cases such as being sued by the victim or having a civil lawsuit filed against you by an aggrieved party.

How to Protect your data

Data privacy is a serious concern for businesses that collect and process personal data. If you don't take steps to protect your customers' data, you will be held liable for any breach of their privacy.

When it comes to protecting customer data, many businesses choose the easy way out — they just don't ask for permission to share it with third parties. That's a bad idea because it creates legal and financial risks. 

Here are some tips on how to keep your customers' data safe:

Know your customer (KYC)

KYC practices ensure that businesses verify the identity of their customers, which helps ensure that they're complying with all relevant regulations and laws. It also helps protect against fraud or identity theft by verifying who you really are as an entity — not just as an individual (like when you log into your bank account). It's also important for companies to understand how their customers use their products and services, so they can make sure they're providing value over time and making money back for themselves (when applicable).

Ask permission

Before collecting or sharing any personal information, make sure you have the customer's consent. This can be as simple as asking if they would like to receive marketing materials from you or other third parties. It may also require more work — such as obtaining an opt-in from email subscribers or social network followers.

Know what information you're collecting

Before collecting any sensitive data about your customers, such as credit card numbers or Social Security numbers, check with the relevant federal agencies for guidance on what types of information are allowed to be shared with third parties. Also, review any terms of service agreements (TOS) provided by online services like social media platforms that allow them to sell customer lists or other customer information without consent.

Heighten your cyber security measures

Secure sensitive information with encryption. Encryption ensures that sensitive information is sent across the Internet using an unreadable format that only those who possess the correct key can read. The strongest form of encryption is called HTTPS (Hypertext Transfer Protocol Secure). It guarantees that all communications between you and your website are private and secure by encrypting them with an algorithm called Secure Sockets Layer (SSL). SSL protects information at rest, in transit, and in use on a web page, which includes user names, passwords, and other sensitive data such as social security numbers or driver's license numbers.

Here are some other tips:

• Train staff on how to handle sensitive information and keep it secure at all times.
• Protect your accounts from hackers by regularly monitoring your systems for vulnerabilities and patching them when necessary.
• Train employees on what is considered confidential information so they don't accidentally release it on accident or share it with unauthorized parties without their knowledge or consent (like competitors).
• Institute a policy that prohibits employees from using personal devices to access company files or documents while at work (this includes smartphones).

About the Author Shaun McIver

Shaun McIver is the Founder and CEO of Vayle, a leading provider of information security and privacy compliance solutions. Prior to founding Vayle, Shaun held senior executive positions at Thomson Reuters, Nasdaq, and TMX Group, where he led global technology businesses and digital transformation programs. He is also an active writer on the topics of data privacy and protection and has had op-eds published in ITWorld Canada, CPO Magazine, and other outlets.