businessman in jail

The Absolute Worst-Case Scenarios That Can Result From Non-Compliance

As we mentioned in our last blog, regulatory compliance is not a topic to be brushed aside. Non-compliance can result in some serious consequences, including:

Losing All of Your Clients

This may sound a bit extreme, but it’s possible in the absolute worst-case scenario. When you don’t take regulatory compliance seriously, your clients get worried. They are trusting you with their personal information, such as their credit card or health information. Imagine it yourself. How would you feel if your credit card information wasn’t protected up to government standards?

When a business is non-compliant, it can destroy their reputation. And, as all businessmen and women know, your company’s reputation is essential for its survival. The trust and confidence that your clients have can be a direct effect on your enterprise’s bottom line. Non-compliance can absolutely destroy that.

Losing (Almost) All of Your Money

Non-compliance comes at a price. Violation fines can get very expensive. For example, violating SOX compliance can result in a fine of more than $10 million. $10 million. That’s an extraordinary amount of money that could easily have been saved otherwise.

With a trusted partner like Cognoscape, we’ll make sure that you never fall into that danger zone. We know how hard you’ve worked for your success, so it would be completely devastating if it all can crashing down due to something as preventable as non-compliance.

Jail Time

In the worst case scenario, non-compliance can also result in jail time. SOX compliance violations can actually amount to up to 30 years in jail. This is not only the most devastating way to ruin you and your business’ reputation, but it could also put you out of business, permanently.

Avoid Non-Compliance with Cognoscape

Cognoscape will make sure that none of your IT equipment or IT practices are ever in violation of the law. Our experts are always staying up-to-date on the latest changes and requirements, and we promise to always relay that information back to you and make the necessary changes. We’ll help you keep all your clients, your business success, and, most importantly, keep you out of jail. Give us a call.

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A Reminder On Why Regulatory Compliance Is So Important

Regulatory compliance isn’t a matter to brush off lightly. These laws and requirements are put in place to not only protect your business, but also your customers. As a quick reminder, three of the main players in regulatory compliance are:

HIPAA – HIPAA stands for the Health Insurance Portability & Accountability Act. This act, established in 1996, affects organizations that handle health information (PHI) or personal health records (PHR). Such organizations include clinics, hospitals, nursing homes, psychologists, dentists, and pharmacies. These regulations protect the rights of patient authorization and who can view personal health information.

SOX – The Sarbanes-Oxley (SOX) Act is a US federal law that was established in 2002 in response to a number of major corporate and accounting scandals. Some of the organizations involved in these scandals were Enron, Tyco International, and WorldCom. This law addresses how to handle corporate governance, auditing, and financial reporting so that those scandals never happen again.

PCI – The payment card industry (PCI) is established to protect our card information. Credit card companies such as Visa, MasterCard, American Express, and Discover abide by a set of data security standards (PCI DSS) that aim to reduce payment card fraud and theft.

What Happens If You Ignore Regulatory Compliance Regulations

As you can tell, regulatory compliance requirements protect very important and sensitive data. Failing to follow the rules and regulations set out can result in some very severe punishments, such as large fines and even jail time. For example, failure to adhere to SOX Compliance can result in a fine of more than $10 million and 30 years in jail.

Falling out of regulatory compliance will also damage your enterprise’s reputation and cause your clients to lose faith in you. The accounting scandals of 2002 caused the whole nation to lose trust in accounting and reporting practices. Also, let’s look at PCI compliance. If your personal credit card and financial information wasn’t protected and was left at the risk of being stolen, used, and manipulated, would you really continue to trust your information with its current protector?

The answer is no. It’s not easy to entrust your classified data and personal property to someone new. Regulatory compliance standards, however, give users the comfort and confidence to do just that.

Allowing Cognoscape to properly maintain and uphold your compliance will ensure security on all ends. We are always keeping up with the laws and staying up to date on any changes that occur.

Have any questions? Click here to read our eBook on the science behind regulatory compliance.

A compass on top of a road map, ready to help you navigate through regulatory compliance

Our Spring eBook was Created for You to Understand Regulatory Compliance

Regulatory compliance is important to a company because it will ensure adherence to various state and federal laws, standards, procedures, and industry-specific requirements relevant to their success. Failure to comply to regulatory compliance will subject the company to legal punishments and federal fines. Strict rules and regulations will allow a company to remain a reputable business. When it comes to storing and transmitting classified data, protection of all intellectual property needs to be of utmost importance. There are various types of regulatory compliance laws, but the three main players are HIPAA, SOX, and PCI.

HIPAA Compliance

HIPAA stands for the Health Insurance Portability & Accountability Act of 1996, concerns organizations who handle protected health information (PHI) or personal health records (PHR). The most common types of covered entities include health insurance providers and most healthcare providers such as doctors, clinics, hospitals, nursing homes, psychologists, dentists, and pharmacies. The limitations, laid heavily by the US Department of Health and Human Services, deal with the handling and disclosure of PHI without patient authorization. This also allows patients to gain access of their own personal medical records without any lash out. IT providers who partner with health industries need to know they can directly impact these regulations with the services they provide. Being well versed in the privacy and security of these rules will help keep all aspects of the business running. Companies that handle health care information need to combat breaches with HIPAA security rules that safeguard their electronic PHI.

SOX Compliance

The Sarbanes-Oxley (SOX) Act of 2002 is a US federal law passed in response to a number of major corporate and accounting scandals. Some of the big companies involved were Enron (2001), Tyco International (2002), American Insurance Group (2005), and WorldCom (2002). As a result from these shocking scandals the nation lost trust in accounting and reporting practices. These new standards for corporate governance, auditing, and financial reporting will protect investors of US based public organizations. Allowing Cognoscape to properly maintain and uphold your compliance will ensure network security and leave you worry free in case of an audit.

PCI Compliance

The payment card industry (PCI) is comprised of credit card companies such as Visa, MasterCard, American Express, Discover, and the Japanese Credit Bureau. These companies assembled to create a set of data security standards (PCI DSS) with the goal of reducing payment card fraud and theft. PCI compliance should be a largely discussed topic if your business handles credit card payments and financial transactions. Failure to protect your clients and your business from breaches will result in damaged reputation and loss of your customers’ trust. Save yourself the heartache, fines, and reputational damage and follow the standards set by PCI DSS. IT companies who service all business with credit card functions should provide the tools and measurements needed to protect against cardholder data exposure and compromise across the entire payment industry.

Cognoscape has developed the ultimate roadmap to guide you through regulatory compliance. Read the full eBook here for more detailed information.