It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
Primary source: FTC Safeguards Rule business guidance
Does the under-5,000-consumer exemption apply to an account servicer?
Details
Servicers frequently exceed the threshold because one client file can contain thousands of accounts. If a niche servicer is below it, the exception remains narrow. The firm should document the count method, because old files, leads, former customers, and retained records can matter.
Primary source: FTC Safeguards Rule business guidance.
FAQ
Does the under-5,000-consumer exemption apply to an account servicer?
It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
What is the data-flow issue for an account servicer?
Servicing data lives in boarding files, account platforms, payment systems, call-center tools, correspondence queues, dispute workflows, vendor portals, and investor or client reports. The WISP should identify data received from the owner and data generated by servicing activity.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.