Criminals are always looking for ways to get their hands on your customers' personal information, so you have to remain diligent about protecting it by shredding documents and protecting your network. If you fail to do so, you could face numerous financial hardships that may put you out of business forever. If you have a small business, you're especially vulnerable because you probably don't have the funds necessary to navigate your way through a data breach scandal. Following are three reasons why you should start shredding documents today if your'e not already doing so.
You Could Be Fined
If you fail to follow the guidelines and laws set out by the Federal Trade Commission, you could be fined. Unfortunately, the fines can get quite high. Recently, a major communications company was levied a $25 million fine for a data breach that occurred online. In addition to protecting online information, companies are required to protect consumer information by establishing a routine document shredding program. If you fail to do so, you could face civil charges.
You May Be Liable
Did you know that you may be held accountable for a data breach, which means that your customers can sue you? It's true, and the settlements can be astronomical. Recently, one major retailer had to pay out nearly $200 million in settlements to customers whose personal information was stolen. And it's not only retailers that are in danger of lawsuits. Anyone who collects and stores personal information can be held liable if a breach occurs. Case in point, two major healthcare companies are facing lawsuits in 2015, and the settlements from said lawsuits are expected to break records.
While you can purchase insurance to help you cover financial losses sustained after a data breach, it may not pay for everything. Your business could take a major hit. Small business, especially, may find that they cannot afford to keep their doors open after a breach.
Your Reputation Can Suffer
Data breaches always tar the image of the company in question. If you experience a breach, you can expect that your business will take a hit and that your customers will lose faith in you. Regaining your customers' faith often takes a great marketing campaign, which can cost a great deal of money. So in addition to paying out money for fines and lawsuit settlements, you will also have to pay for a faith-building campaign.
As you can see, you could be out millions of dollars after a data breach. Such a financial loss could put you out of business forever. For this reason, it's vital that you routinely shred documents that have personal information on them. For more information, talk to a company like File Finders LTD.
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