As was predicted, 2023 continues to be the year of data privacy as four states adopt (or will adopt) their own personal data laws. Specifically, at the time of this writing, the governors of the states of Indiana, Montana, Tennessee, and Texas have either signed bills to create their own states’ data privacy laws or have bills that are awaiting their signatures. Once completed, this would bring the total number of data privacy laws in the United States to ten. Each of these laws are called the following:

• Indiana – Indiana Consumer Data Protection Act (“ICDPA,” Senate Bill 5)
• Montana – Montana Consumer Data Privacy Act (“MCDPA,” Senate Bill 384)
• Tennessee – Tennessee Information Protection Act (“TIPA,” House Bill 1181)
• Texas – Texas Data Privacy and Security Act (“TDPSA,” House Bill 4)

In an attempt to not bore you with the details, we will take this opportunity to discuss each of these new laws in very broad strokes. Specifically, we will touch on what new requirements are placed on Controllers (i.e. “Dealers”), what new rights are afforded to consumers, the penalties for violating these laws, and their respective effective dates.

As each of these dates draws nearer, we will take a deeper dive in each of the laws so that you will be well prepared to take on these new consumer protection laws. Rest assured, ComplyAuto has you completely covered in our Privacy Rights Management system which will account for the more state-specific requirements as their respective deadlines approach. It is a brave new world we live in and we can no longer stand idly by.

Controller (i.e. Dealership) Requirements:

Requirement #1: Securing Your Data by Reinforcing Cybersecurity Protocols

States recognize that dealerships collect a wealth of consumer data and have used personal data laws as an opportunity to require that businesses secure this information from unauthorized access. Dealerships in these states must establish, implement, and maintain reasonable technical and physical security practices to protect the confidentiality, integrity, and accessibility of consumer personal data. We believe the intent by the respective authors is for dealerships to adopt security measures that are similar to the data protection and cybersecurity standards as required by the Safeguards Rule. Meaning, if you fulfill the Safeguards Rule you will more than likely meet the threshold that is required by these laws.

Requirement #2: Privacy Policy and other Disclosures

Dealerships will need to update their existing privacy policies to reflect certain information in regards to the consumer personal information that it collects. Specifically, the privacy policy needs to state the following: 

1. A description of the Data Subject Access Request (DSAR) portal – more about this below; 
2. The categories of personal data it processes;
3. The purpose for which the personal data is collected and processed;
4. Instructions on how consumers may exercise their consumer rights;
5. The categories of personal data that are shared with third parties; and
6. The categories of third parties with whom the consumer’s personal data is shared.

Requirement #3: Cookie Consent Banner

Dealerships will also need to clearly and conspicuously disclose if it sells or uses a consumer’s personal data for “targeted advertising” and first obtain consent if the dealership is going to process the information in this fashion. In all of these laws, “targeted advertising” means displaying advertisements to consumers based on personal information obtained from that consumer’s activities over time and across non-affiliated websites or online applications to predict the consumer’s preferences or interests. 

Practically speaking, this can all be easily achieved by using a cookie consent banner that blocks very specific cookies (i.e. cross-contextual behavioral advertising cookies for targeted advertising as defined above) from loading on a consumer’s device until the consumer consents. 

Additionally, dealerships cannot collect a consumer’s “sensitive data” (i.e. geolocation data in the context of the automotive industry) without first obtaining the consumer’s consent. A cookie consent banner will also achieve this requirement. 

Requirement #4: Contracts with Data Processors

All of a dealership’s processors must sign a binding contract with the dealership that provides for each of the following:

1. instructions for processing personal data, 
2. the nature and purpose for processing personal data, 
3. the type of personal data subject to processing; 
4. the duration of processing; 
5. the rights and obligations of both parties;
6. reasonable risk assessments; and 
7. contractually require subcontractors to meet the same obligations as the processor with respect to the personal data.

These contracts must also ensure that the processor is subject to a duty of confidentiality with respect to the personal data and, at the controller’s direction, the processor must delete or return all personal data to the dealership as requested at the end of the provision of services unless its retention is required by law.

Consumer Rights:

Types of Requests

Under each of these laws, consumers will have the right to do each of the following:

1. confirm whether or not the dealership is processing the consumer’s personal data and access such data;
2. request the dealership to correct inaccurate information about the consumer that was previously provided to the dealership;
3. request the dealership to delete personal data about the consumer;
4. request from the dealership a copy or summary the consumer’s personal data; and
5. request to opt out of the processing of the consumer’s personal data for the purposes of targeted advertising, the sale of personal data or profiling in furtherance of decisions that produce legal or similarly significant effects concerning the consumer.

Time to Respond to Requests

The dealership has forty-five (45) days after the receipt of the consumer’s request to either fulfill or deny the consumer’s request. The response period may be extended by another forty-five (45) days as long as the controller informs the consumer within the initial forty-five (45) days and has a reason for the extension. The dealership must also authenticate the request using commercially reasonable efforts or it may request the consumer to provide additional information reasonably necessary to authenticate the consumer and their request. 

If the consumer’s request is denied, the dealership must provide instructions for how to appeal the decision. The appeal process must be conspicuously available and similar to the process for submitting requests.  

The most efficient way to fulfill this requirement is providing a Data Subject Access Request (DSAR) portal that not only provides solutions for each of the types of requirements but also authenticates the request to ensure that the dealership is not fulfilling fraudulent requests.

Montana: Authorized Agents

In Montana, a consumer may designate another person to serve as their authorized agent and act on their behalf to submit opt out-out requests. The dealership must comply with an authorized agent’s opt-out request as long as the dealership is able to properly verify the identity of the consumer and the authorized agent’s authority to act on the consumer’s behalf. Montana dealerships must provide a clear and conspicuous link on the dealership’s website to a web page that allows the consumer, or an authorized agent of the consumer, to submit their opt out request. 

An interesting point here is that Montana laws view a consumer’s global device settings or controls on their device as a valid opt-out request from an authorized agent that dealerships must fulfill. Meaning, dealerships’ websites must be able to respond to these universal opt-out signals accordingly. 

Enforcement:

In each of Indiana, Montana, Tennessee, and Texas, the Attorney General maintains exclusive authority to enforce their respective personal data laws. In every state except Montana, the AG may seek an injunction against any business that violates the respective personal data law as well as levy a civil penalty of no more than $7,500 per violation.

Effective Date:

The Indiana Consumer Data Protection Act has an effective date of January 1, 2026.

The Montana Consumer Data Protection Act has an effective date of October 1, 2024.

The Tennessee Information Protection Act has an effective date of July 1, 2025.

The Texas Data Privacy and Security Act has an effective date of March 1, 2024.

This article should be used as a compliance aid only and though its accuracy has been made a priority, it is not a substitute for professional legal advice. Each dealer should rely on their own expertise when using it.