Back in August, we wrote about the California Consumer Privacy Act (CCPA), and how it will likely spark changes in how companies handle private data. Five months later, the CCPA has now gone into effect—meaning that now is the perfect time to revisit just what it will entail, how it could impact your firm, and why accountants need to take action to protect their client data more than ever before.
Refresher: Consumer Privacy and the GDPR
The CCPA is very similar to the European Union’s GDPR (General Data Protection Regulation), which requires businesses to protect the personal data and privacy of all EU citizens. Most notably for American readers, this law applies not just to companies which have handled an EU citizen’s information in the past, but those that might do so in the future. This is why, when the GDPR went into effect, almost every business was affected, even all the way across the pond (you may recall the slew of we’re-updating-our-privacy-policy emails you received around this time.)
The CCPA is a very similar regulation, this time implemented by the US state of California. Just like the GDPR, the CCPA will apply to anyone who has previously, or might someday, do business with a Californian—in other words, almost everyone.
What Does the CCPA Do?
To make a long story short, the CCPA primarily requires companies to reveal what data they have collected, or are currently collecting, on their users. The law also requires organizations to share whether or not they are selling that consumer data to private entities. Finally, the CCPA requires require all companies to give consumers a clear opt-out option to prevent the sale of their personal data. If a company reveals itself to already be in possession of an individual’s data, under the CCPA, they must erase it from their company database.
Why Should My Accounting Firm Prepare for The CCPA?
According to the CCPA, if a business fails to “implement and maintain reasonable security procedures and practices,” it can be fined for up to $7,000 per incident. That means that if your accounting firm has one thousand clients in your database, a single security breach could cost you upwards of $7,000,000—in fines alone! Obviously, that’s enough to devastate even a large accounting firm—far from a light slap on the wrist.
How Can Client Portal Software for Accountants Protect Me from Fines and Litigation?
One of the most important things you can do to protect your firm from litigation—not just from the CCPA, but from anyone and everyone—is use a secure, encrypted client portal software to handle all client data. If you or your employees are still exchanging private client data through unprotected public email servers, you are at great risk for losing it in a cyberattack. If the subsequent data ends up in the wrong hands, and you are found to be at fault, you will be penalized by the CCPA, GDPR, and individual lawsuits. Accountants, lawyers, and medical practitioners should only exchange client data through a secure client portal tool—not just for the safety of your clients and their data, but for the safety of your practice, your reputation, and your livelihood.
Comply with the CCPA and Avoid Fines with Our Client Portal for CPAs
The CCPA went into effect on January 1st, but if you’re not prepared for it, you still have a little time to get ready: The California Attorney General will not be able to begin enforcement actions until July 1st. By proactively investing in secure file sharing software for accountants, you can make sure you are in compliance while providing the safest possible environment for your clients. To learn more about ImagineShare, ImagineTime’s client portal software for accountants, request your free demo today.
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