Free IAPP CIPP-US Practice Exam with Questions & Answers | Set: 3

The FTC’s privacy report, titled “Protecting Consumer Privacy in an Era of Rapid Change”, proposed a framework for companies that collect and use consumer data. The framework consisted of three core principles: privacy by design, simplified consumer choice, and greater transparency. Privacy by design means that companies should incorporate privacy protections into their everyday business practices, such as data security, reasonable collection limits, sound retention practices, and data accuracy. Simplified consumer choice means that companies should provide consumers with clear and easy-to-understand choices about the collection and use of their data, and respect their preferences. Greater transparency means that companies should increase the visibility and accessibility of their data practices, such as providing clear and concise privacy notices, educating consumers about the commercial datapractices, and providing consumers with access to their data. Enhancing security measures is not one of the core principles of the FTC’s privacy framework, although it is a component of the privacy by design principle. References:

IAPP CIPP/US Body of Knowledge, Section I.A.1.a

IAPP CIPP/US Textbook, Chapter 1, pp. 13-15

FTC Privacy Report, Executive Summary, pp. i-vii

Most state laws require that a person or business that conducts business in the state and owns or licenses personal information of residents of that state must notify those residents of any breach of the security of the system involving their personal information. This means that the entity does not have to be physically located in the state, have employees in the state, or be registered inthe state to be subject to the breach notification requirements, as long as it conducts business in the state and holds personal information of state residents. Conducting business in the state can be interpreted broadly to include any transaction or activity that involves the state or its residents, such as selling goods or services, collecting payments, or maintaining a website accessible by state residents. The other options (B, C, and D) are not commonly required by most state laws, although some states may have additional or specific requirements for certain types of entities, such as information brokers, health care providers, or financial institutions. References:

Security Breach Notification Chart | Perkins Coie

Security Breach Notification Laws - National Conference of State Legislatures

IAPP CIPP/US Certified Information Privacy Professional Study Guide, Chapter 4: State Privacy Laws and Regulations, Section 4.2: State Security Breach Notification Laws.

The Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act is a law passed in 2003 that establishes the first national standards for the sending of commercial e-mail in the United States. The law requires the Federal Trade Commission (FTC) to enforce its provisions. The law applies to any commercial e-mail message, which is defined as any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service. The law does not apply to transactional or relationship messages, which are messages that facilitate an agreed-upon transaction or update a customer about an existing business relationship. The law also does not apply to non-commercial messages, such as political or charitable solicitations12

The CAN-SPAM Act is intended to help consumers by giving them more control over the commercial e-mails they receive. The law does not require companies to obtain prior consent (opt-in) from consumers before sending them commercial e-mails, but it does require companies to honor consumers’ requests to stop receiving such e-mails (opt-out). The law specifies that each commercial e-mail message must include a clear and conspicuous notice of the opportunity to decline to receive further messages from the sender, and a valid physical postal address of the sender. The sender must provide a functioning return e-mail address or other Internet-based mechanism that allows the recipient to submit an opt-out request. The sender must honor the opt-out request within 10 business days and must not sell, exchange, or transferthe e-mail address of the opt-out requester to another entity, unless the other entity is acting as an agent of the sender12

By requiring companies to allow consumers to opt-out of future e-mails, the CAN-SPAM Act aims to reduce the amount of unwanted and unsolicited commercial e-mail that consumers receive, and to protect their privacy and preferences. The law also imposes other requirements on companies that send commercial e-mails, such as banning false or misleading header information and deceptive subject lines, requiring the identification of the message as an advertisement, and requiring the labeling of sexually explicit content. The law also authorizes the FTC and other federal agencies to enforce the law and impose civil penalties for violations12

References:

Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act)

IAPP CIPP/US Certified Information Privacy Professional Study Guide, Chapter 4: Federal Privacy Laws, Section 4.4: The CAN-SPAM Act

The best way for Otto to minimize the privacy risks involved in using a cloud provider for the HR data is to ensure that the cloud provider abides by the contractual requirements by conducting an on-site audit. This would allow Otto to verify that the cloud provider has implemented adequate security measures, such as encryption, access controls, and backup systems, to protect the HR data from unauthorized access, use, or disclosure. It would also allow Otto to check that the cloud provider is complying with the applicable privacy laws and regulations, such as the CCPA, the APEC Privacy Framework, and the breach notification requirements. By conducting an on-site audit, Otto can identify any gaps or weaknesses in the cloud provider’s privacy practices and address them promptly. This would also demonstrate due diligence and accountability on the part of Filtration Station, which could mitigate the legal and reputational consequences of a data breach. References:

[IAPP CIPP/US Study Guide], Chapter 3: Data Assessments, pp. 77-78.

IAPP CIPP/US Body of Knowledge, Section III: Government and Court Access to Private-sector Information, Subsection B: Cross-Border Data Transfer, Topic 2: APEC Privacy Framework.

IAPP CIPP/US Practice Questions, Question 125.

The Global Privacy Enforcement Network (GPEN) is a network for privacy enforcement authorities (PEAs) to share knowledge, experience and best practices on the practical aspects of privacy enforcement and cooperation. GPEN was created in response to the OECD Recommendation on Cross-border Cooperation in the Enforcement of Laws Protecting Privacy, which called for member countries to foster the establishment of an informal network of PEAs. GPEN’s main purpose is to facilitate cross-border cooperation and coordination among PEAs, especially in cases involving multiple jurisdictions or regions. GPEN also aims to enhance information sharing, promote awareness and education, and support capacity building among PEAs. References:

Home (public) | Global Privacy Enforcement Network

Global Privacy Enforcement Network - International Association of Privacy Professionals

International Partnerships - Office of the Privacy Commissioner of Canada

Specialised networks – Global Privacy Assembly

Action Plan for the Global Privacy Enforcement Network (GPEN)

[IAPP CIPP/US Certified Information Privacy Professional Study Guide], Chapter 6, page 213.

The Consumer Financial Protection Bureau (CFPB) has rulemaking authority for the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACTA), as well as other consumer financial laws. The Dodd-Frank Act, enacted in 2010, transferred most of the rulemaking responsibilities added to the FCRA by the FACTA and the Credit CARD Act from the Federal Trade Commission (FTC) to the CFPB. However, the FTC retains its enforcement authority for the FCRA and the FACTA, along with other federal and state agencies1. The CFPB also shares rulemaking authority for some provisions of the FACTA with the FTC, such as the identity theft red flags and address discrepancy rules2. The Department of Commerce and the State Attorneys General do not have rulemaking authority for the FCRA or the FACTA. References: 1: FTC3, Fair Credit Reporting Act; 2: CFPB4, Fair Credit Reporting Act; 3: FTC; 4: CFPB.

According to the Privacy Shield Principles, an organization that self-certifies under the Privacy Shield Framework must provide individuals with the choice to opt out of the disclosure of their personal information to a third party or the use of their personal information for a purpose that is materially different from the purpose for which it was originally collected or subsequently authorized by the individual. To facilitate this choice, the organization must inform the individual of the type or identity of the third parties to which it discloses personal information and the purposes for which it does so. The organization must also provide a readily available and affordable independent recourse mechanism to investigate and resolve complaints and disputes regarding its compliance with the Privacy Shield Principles. If the organization transfers personal information to a third party acting as an agent, it must ensure that the agent provides at least the same level of privacy protection as is required by the Privacy Shield Principles and that it takes reasonable and appropriate steps to ensure that the agent effectively processes the personal information transferred in a manner consistent with the organization’s obligations under the Privacy Shield Principles. References:

Privacy Shield Principles, section II. Choice Principle and section III. Accountability for Onward Transfer Principle

[IAPP CIPP/US Study Guide], p. 67-68, section 3.2.1 and p. 69-70, section 3.2.2

[IAPP CIPP/US Body of Knowledge], p. 15-16, section C.1.b and p. 16-17, section C.1.c

Access is the privacy concept that grants a consumer the right to view and correct errors on his or her credit report. The Fair Credit Reporting Act (FCRA) gives consumers the right to access their credit reports from the three nationwide credit reporting agencies (Equifax, Experian, and TransUnion) once every 12 months for free. Consumers also have the right to dispute any inaccurate or incomplete information in their credit reports and request that the credit reporting agencies investigate and correct the errors. The FCRA also requires the credit reporting agencies to provide consumers with a notice of their rights and a summary of the dispute process. References:

IAPP CIPP/US Certified Information Privacy Professional Study Guide, Chapter 2: Limits on Private-sector Collection and Use of Data, Section 2.2: Consumer Privacy, p. 38-39

IAPP CIPP/US Body of Knowledge, Domain II: Limits on Private-sector Collection and Use of Data, Objective II.B: Identify the privacy requirements for consumer data, Subobjective II.B.1: Identify the consumer rights under the Fair Credit Reporting Act, p. 13

IAPP CIPP/US Exam Blueprint, Domain II: Limits on Private-sector Collection and Use of Data, Objective II.B: Identify the privacy requirements for consumer data, Subobjective II.B.1: Identify the consumer rights under the Fair Credit Reporting Act, p. 4

 Under state breach notification laws, personal information is typically defined as an individual’s first name or first initial and last name plus one or more other data elements, such as Social Security number, state identification number, account number, medical information, etc. However, first and last name alone are not usually considered personal information, unless they are combined with other data elements that could identify the individual or compromise their security or privacy. Therefore, option B is the correct answer, as it is not typically included in the definition of personal information under state breach notification laws. References: https://www.ncsl.org/technology-and-communication/security-breach-notification-laws https://iapp.org/resources/article/state-data-breach-notification-chart/

A private right of action is a legal provision that grants individuals the ability to bring a lawsuit against a party that has wronged them and to seek redress for the harm that they have suffered. A private right of action is a fundamental component of the U.S. judicial system and an essential element of enforcingprivacy rights. Privacy advocates argue that a private right of action is necessary to hold perpetrators of privacy violations accountable and to address the limitations of the FTC’s enforcement authority. However, businesses are concerned that a private right of action would lead to a proliferation of frivolous lawsuits that would burden responsible data processors and impede innovation. References:

U.S. Private-Sector Privacy, Third Edition by Peter P. Swire, DeBrae Kennedy-Mayo, Chapter 2, Section 2.3.3, pp. 35-36.

How to end the deadlock on the private right of action by Paula Bruening, IAPP Privacy Perspectives, Jan 20, 2022.

Private Right of Action (Legal Definition & Examples) by Lawrina, accessed on Jan 25, 2022.