Homeowners’ associations (HOAs) collect a significant amount of personal data from members, including names, addresses, and contact and financial information. This data, when in the hands of cybercriminals, can be wrongly used for actions such as identity theft, fraud, and other malicious purposes.

Below, we’ve rounded up nine important steps you should take to avoid an HOA data breach and keep confidential details safe.

What’s an HOA data breach?

An HOA data breach occurs when the private or personal information of an HOA and/or its members is accessed or disclosed without authorization. This can include sensitive information such as names, addresses, contact information, financial information, and Social Security numbers.

Most HOA data breaches are done through specific tactics such as:

• Hacking: Hackers can gain access to HOA data by exploiting vulnerabilities in software or networks.
• Phishing scams: Phishing emails or websites can trick HOA members into clicking on malicious links, revealing their personal information.
• Malware: Malware can be installed on HOA computers or networks to steal data.
• Insider threats: Employees or volunteers with access to HOA data may intentionally or accidentally disclose it.

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How important is data security in HOAs?

HOAs, just like any other customer-focused business, are legally obliged to safely store all data. Neglecting to securely store members' sensitive personal information for dues collection, communication, and record-keeping purposes can impact everyone negatively. Not implementing the correct data practices may expose your HOA, partners, and residents to data breach risks such as fraud, identity theft, financial losses, and more. By prioritizing data security, HOAs can protect their members' information, maintain trust, and avoid liabilities.

Nine tips to prevent an HOA data breach

With the advancements in technology, there are many ways you can ensure security when storing information. Your HOA should consider incorporating the following best practices for optimal security:

1. Practice good password security etiquette

To enhance HOA data protection, encourage members to use a secure password for their accounts and member portal or trusted community app like TownSq. When crafting passwords, many experts suggest they should be a minimum of eight to 12 characters. This includes using at least three of the following elements:

• Uppercase letters
• Lowercase letters
• Numbers
• Special characters

2. Educate board members

A successful board is well-informed, and its members should be knowledgeable about data security. It’s advisable to organize an annual training session for board members to delve into topics related to data safety and cybersecurity.

Every board member should be familiar with the type of data the association retains, its purpose, and the measures to secure it. Remember to create an atmosphere that motivates board members to ask questions and promotes transparency in responsibilities and solutions.  

3. Educate residents

It's crucial to educate residents about data security, too. Consistently sharing rules and details about data security plans with residents assures them that their data is safeguarded. These communications should also motivate residents to play their part in protecting data. Offer practical tips on topics such as preventing cyberattacks, using technology devices wisely, and creating strong passwords. The more informed people are, the safer the community will be.

4. Create a document policy

HOA boards should collaborate closely with the community manager to establish a policy for protecting the association's data. Collaborating with a community manager ensures a clear grasp of data security measures and helps establish effective protocols customized to the community's needs. When drafting this policy, do the following:

• Identify sensitive data, such as account numbers and contact information.
• Define the various types of data that your association will store.
• Determine the methods for storing the information securely.
• Assess the software currently employed by the association for tracking and storing data.
• Review existing protective measures in place.
• Develop protocols for addressing a potential data breach.
• Establish procedures for system resets after a breach to prevent recurrence.
• Define rules governing the use of technology programs provided by the association.

5. Dispose outdated documents properly

If any records or documents become obsolete or no longer needed, the HOA must appropriately dispose of them, so they don’t fall into the wrong hands. This involves shredding physical documents and permanently deleting data from storage. One way to do this is by burning, shredding, and pulverizing paper documents to eliminate any traces and prevent reconstruction. This guarantees that no one else can access them at a later time.

6. Limit data access and use

A fundamental step in avoiding an HOA data breach is managing who can access the data on your systems. Breaches may not always be external; sometimes, they can originate from within the organization. While board members usually have complete access to all association information, committee members and regular homeowners shouldn't. This helps maintain confidentiality and protect sensitive association information from unnecessary exposure.

7. Understand your local, state, and federal laws

There are laws about how your HOA's data should be kept safe. These regulations vary by location, so carefully check the local, state, and federal regulations and understand your requirements.

These laws and guidelines will outline what your association needs to do to make sure you're legally and correctly protecting your data. Ask your lawyer or community manager for assistance if needed. You can also find information about data protocols in your association's governing documents.

8. Review your HOA’s insurance coverage

HOAs should have insurance for property damage, liability issues, and financial coverage for potential losses or damages. Review your association's insurance policies to confirm you have coverage if a data breach happens. Remember that these policies usually don't cover cyber liabilities or data breaches unless it's mentioned. Consult with your insurance agent if you have questions or need further information.

9. Choose a secure technology partner

Homeowners look for a digital platform to store their data, allow them to make payments, and give them a place to communicate with leaders and neighbors. They also want a platform they can trust. For this reason, boards should choose a security-focused technology partner by asking the following questions:

• Data hosting: How do you store data?
• Data encryption: What strategies do you use to protect data from unauthorized access?
• Data access: Who has access to the HOA's data, and why?
• Access management: How do you control and manage access to data?
• Data recovery: What process do you follow to recover data in case of loss or corruption?

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Prevent an HOA Data Breach with Reliable Technology

Taking these steps to secure your community and protect information is a great way to safeguard your HOA data from breaches. You can take it further by using reliable technology like TownSq, an industry-leading community management app. Its user-friendly solutions and security significantly reduce the risk of threats. Take a proactive step by signing up for a TownSq free 30-day trial today to ensure your community's data integrity!