Ford has issued an “Amended and Restated Consumer Data Agreement” (“Revised Agreement”) to Ford and Lincoln dealers that updates the current Consumer Data Agreement. The Revised Agreement addresses state omnibus privacy laws and adds several important contract terms regarding data security that are required under the revised FTC Safeguards Rule.

Dealers have faced massive uncertainty over the past few years regarding compliance with the requirements of the revised Safeguards Rule. One important question has been the scope of the applicability of the Rule to contracts with OEMs. This is a complicated and fact specific issue, but what is clear is that data security is a dealer focus and that any third party (including a manufacturer) that obtains sensitive customer data from dealers must agree, by contract, to certain data security requirements with respect to that data.

Ford, through its dealer council, worked with NADA to address dealer compliance concerns related to the Safeguards Rule in the existing Ford Consumer Data Agreement. After a number of conversations, Ford agreed to issue the Revised Agreement to specifically address these (and other) concerns. Ford also worked with NADA in addressing a series of FAQs about the Revised Agreement. That document is helpful, and dealers (as well as their legal counsel and IT professionals) should review it and the Revised Agreement carefully.

As noted, the revised Safeguards Rule is not always clear, it is untested in the courts, and the FTC has not issued clear guidance on exactly what contract language is required, so it is exceedingly difficult to fully ensure compliance. However, the Revised Agreement includes provisions that are intended to meet both the data security and monitoring requirements of the Safeguards Rule.

The Revised Agreement may not be perfect, and every dealer must make its own decision about this or any other agreement. However, NADA does believe the added Safeguards provisions and other language in the Revised Agreement are positive for Ford and Ford/Lincoln dealers. NADA would like to express its appreciation to Ford for its efforts in amending this agreement to address this important compliance concern, for its continued willingness to work with NADA on this and other data sharing and compliance efforts, and for taking the additional steps necessary to protect Ford customer data and privacy.