Free IAPP CIPP-US Practice Exams

Question #1

What is the most likely reason that states have adopted their own data breach notification laws?

A . Many states have unique types of businesses that require specific legislation
B . Many lawmakers believe that federal enforcement of current laws has not been effective
C . Many types of organizations are not currently subject to federal laws regarding breaches
D . Many large businesses have intentionally breached the personal information of their customers

Question #2

SCENARIO

Please use the following to answer the next QUESTION

Noah is trying to get a new job involving the management of money. He has a poor personal credit rating, but he has made better financial decisions in the past two years.

One potential employer, Arnie’s Emporium, recently called to tell Noah he did not get a position. As part of the application process, Noah signed a consent form allowing the employer to request his credit report from a consumer reporting agency (CRA). Noah thinks that the report hurt his chances, but believes that he may not ever know whether it was his credit that cost him the job. However, Noah is somewhat relieved that he was not offered this particular position. He noticed that the store where he interviewed was extremely disorganized. He imagines that his credit report could still be sitting in the office, unsecured.

Two days ago, Noah got another interview for a position at Sam’s Market. The interviewer told Noah that his credit report would be a factor in the hiring decision. Noah was surprised because he had not seen anything on paper about this when he applied.

Regardless, the effect of Noah’s credit on his employability troubles him, especially since he has tried so hard to improve it. Noah made his worst financial decisions fifteen years ago, and they led to bankruptcy. These were decisions he made as a young man, and most of his debt at the time consisted of student loans, credit card debt, and a few unpaid bills C all of which Noah is still working to pay off. He often laments that decisions he made fifteen years ago are still affecting him today.

In addition, Noah feels that an experience investing with a large bank may have contributed to his financial troubles. In 2007, in an effort to earn money to help pay off his debt, Noah talked to a customer service representative at a large investment company who urged him to purchase stocks. Without understanding the risks, Noah agreed. Unfortunately, Noah lost a great deal of money.

After losing the money, Noah was a customer of another financial institution that suffered a large security breach. Noah was one of millions of customers whose personal information was compromised. He wonders if he may have been a victim of identity theft and whether this may have negatively affected his credit.

Noah hopes that he will soon be able to put these challenges behind him, build excellent credit, and find the perfect job.

Based on the scenario, which legislation should ease Noah’s worry about his credit report as a result of applying at Arnie’s Emporium?

A . The Privacy Rule under the Gramm-Leach-Bliley Act (GLBA).
B . The Safeguards Rule under the Gramm-Leach-Bliley Act (GLBA).
C . The Disposal Rule under the Fair and Accurate Credit Transactions Act (FACTA).
D . The Red Flags Rule under the Fair and Accurate Credit Transactions Act (FACTA).

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Question #3

What important action should a health care provider take if the she wants to qualify for funds under the Health Information Technology for Economic and Clinical Health Act (HITECH)?

A . Make electronic health records (EHRs) part of regular care
B . Bill the majority of patients electronically for their health care
C . Send health information and appointment reminders to patients electronically
D . Keep electronic updates about the Health Insurance Portability and Accountability Act

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Question #4

SCENARIO

Please use the following to answer the next QUESTION:

A US-based startup company is selling a new gaming application. One day, the CEO of the company receives an urgent letter from a prominent EU-based retail partner. Triggered by an unresolved complaint lodged by an EU resident, the letter describes an ongoing investigation by a supervisory authority into the retailer’s data handling practices.

The complainant accuses the retailer of improperly disclosing her personal data, without consent, to parties in the United States. Further, the complainant accuses the EU-based retailer of failing to respond to her

withdrawal of consent and request for erasure of her personal data. Your organization, the US-based startup company, was never informed of this request for erasure by the EU-based retail partner. The supervisory authority investigating the complaint has threatened the suspension of data flows if the parties involved do not cooperate with the investigation. The letter closes with an urgent request: “Please act immediately by identifying all personal data received from our company.”

This is an important partnership. Company executives know that its biggest fans come from Western Europe; and this retailer is primarily responsible for the startup’s rapid market penetration.

As the Company’s data privacy leader, you are sensitive to the criticality of the relationship with the retailer.

Under the General Data Protection Regulation (GDPR), how would the U.S.-based startup company most likely be classified?

A . As a data supervisor
B . As a data processor
C . As a data controller
D . As a data manager

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Question #5

A covered entity suffers a ransomware attack that affects the personal health information (PHI) of more than 500 individuals.

According to Federal law under HIPAA, which of the following would the covered entity NOT have to report the breach to?

A . Department of Health and Human Services
B . The affected individuals
C . The local media
D . Medical providers

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Correct Answer: D
D

Explanation:

According to the Health Insurance Portability and Accountability Act (HIPAA), a covered entity is a health plan, a health care clearinghouse, or a health care provider that transmits any health information in electronic form in connection with a transaction covered by HIPAA. A covered entity must report a breach of unsecured protected health information (PHI) to the following parties: The Department of Health and Human Services (HHS), which is the federal agency responsible for enforcing HIPAA and issuing regulations and guidance on privacy and security issues. A covered entity must notify HHS of a breach affecting 500 or more individuals without unreasonable delay and in no case later than 60 days after discovery of the breach. A covered entity must also notify HHS of breaches affecting fewer than 500 individuals within 60 days of the end of the calendar year in which the breaches occurred.

The affected individuals, who are the individuals whose PHI has been, or is reasonably believed to have been, accessed, acquired, used, or disclosed as a result of the breach. A covered entity must notify the affected individuals without unreasonable delay and in no case later than 60 days after discovery of the breach. The notification must be in writing by first-class mail or, if the individual agrees, by electronic mail. The notification must include a brief description of the breach, the types of information involved, the steps the individual should take to protect themselves, the steps the covered entity is taking to investigate and mitigate the breach, and the contact information of the covered entity.

The local media, if the breach affects more than 500 residents of a state or jurisdiction. A covered entity must notify prominent media outlets serving the state or jurisdiction without unreasonable delay and in no case later than 60 days after discovery of the breach. The notification must include the same information as the notification to the affected individuals.

A covered entity does not have to report the breach to medical providers, unless they are also affected individuals or business associates of the covered entity. A business associate is a person or entity that performs certain functions or activities on behalf of, or provides certain services to, a covered entity that involve the use or disclosure of PHI. A covered entity must have a written contract or agreement with its business associates that requires them to protect the privacy and security of PHI and report any breaches to the covered entity.

Reference: IAPP CIPP/US Body of Knowledge, Domain II: Limits on Private-sector Collection and Use of Data,

Section C: Sector-specific Requirements for Health Information

IAPP CIPP/US Certified Information Privacy Professional Study Guide, Chapter 2: Limits on Private-sector Collection and Use of Data, Section 2.3: Sector-specific Requirements for Health Information Practice Exam – International Association of Privacy Professionals

Question #6

Which of the following is commonly required for an entity to be subject to breach notification requirements under most state laws?

A . The entity must conduct business in the state
B . The entity must have employees in the state
C . The entity must be registered in the state
D . The entity must be an information broker

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Question #7

When does the Telemarketing Sales Rule require an entity to share a do-not-call request across its organization?

A . When the operational structures of its divisions are not transparent
B . When the goods and services sold by its divisions are very similar
C . When a call is not the result of an error or other unforeseen cause
D . When the entity manages user preferences through multiple platforms

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Correct Answer: A
A

Explanation:

The Telemarketing Sales Rule (TSR) is a federal regulation that implements the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994. The TSR aims to protect consumers from deceptive or abusive telemarketing practices, such as unwanted calls, false or misleading claims, unauthorized billing, and privacy violations1.

The TSR requires telemarketers and sellers to comply with the National Do Not Call Registry, which is a list of phone numbers of consumers who have indicated that they do not want to receive telemarketing calls2.

The TSR also requires telemarketers and sellers to honor the do-not-call requests of individual consumers, regardless of whether their numbers are on the National Do Not Call Registry or not2.

A do-not-call request is a statement made by a consumer, either orally or in writing, that they do not wish to receive any more calls from a specific telemarketer or seller2.

The TSR requires an entity to share a do-not-call request across its organization when the operational structures of its divisions are not transparent to consumers3. This means that the entity must treat the do-not-call request as if it applies to all of its affiliates and subsidiaries that engage in telemarketing, unless the consumer would reasonably expect them to be separate and distinct entities based on their names, products, or services3.

The TSR does not require an entity to share a do-not-call request across its organization in the following situations:

When the goods and services sold by its divisions are very similar. This is not a relevant factor for determining whether the entity must share a do-not-call request across its organization. The key factor is whether the consumers can distinguish between the different divisions based on their operational structures3.

When a call is not the result of an error or other unforeseen cause. This is not an exception to the requirement to honor a do-not-call request. The TSR prohibits telemarketers and sellers from calling a consumer who has made a do-not-call request, unless the call falls under one of the specific exemptions, such as calls from or on behalf of tax-exempt nonprofit organizations, calls to consumers with whom the seller has an established business relationship, or calls to consumers who have given

prior express written consent2.

When the entity manages user preferences through multiple platforms. This is not an excuse for not sharing a do-not-call request across its organization. The TSR requires telemarketers and sellers to maintain an internal do-not-call list of consumers who have asked them not to call again, and to update the list at least once every 31 days2. The entity must ensure that the do-not-call request is recorded and communicated across all of its platforms that are used for telemarketing purposes3.

Reference: 1: Telemarketing Sales Rule 2: Q&A for Telemarketers & Sellers About DNC Provisions in TSR 3: Federal Register:: Telemarketing Sales Rule

Question #8

SCENARIO

Please use the following to answer the next QUESTION

Noah is trying to get a new job involving the management of money. He has a poor personal credit rating, but he has made better financial decisions in the past two years.

One potential employer, Arnie’s Emporium, recently called to tell Noah he did not get a position. As part of the application process, Noah signed a consent form allowing the employer to request his credit report from a consumer reporting agency (CRA). Noah thinks that the report hurt his chances, but believes that he may not ever know whether it was his credit that cost him the job. However, Noah is somewhat relieved that he was not offered this particular position. He noticed that the store where he interviewed was extremely disorganized. He imagines that his credit report could still be sitting in the office, unsecured.

Two days ago, Noah got another interview for a position at Sam’s Market. The interviewer told Noah that his credit report would be a factor in the hiring decision. Noah was surprised because he had not seen anything on paper about this when he applied.

Regardless, the effect of Noah’s credit on his employability troubles him, especially since he has tried so hard to improve it. Noah made his worst financial decisions fifteen years ago, and they led to bankruptcy. These were decisions he made as a young man, and most of his debt at the time consisted of student loans, credit card debt, and a few unpaid bills C all of which Noah is still working to pay off. He often laments that decisions he made fifteen years ago are still affecting him today.

In addition, Noah feels that an experience investing with a large bank may have contributed to his financial troubles. In 2007, in an effort to earn money to help pay off his debt, Noah talked to a customer service representative at a large investment company who urged him to purchase stocks. Without understanding the risks, Noah agreed. Unfortunately, Noah lost a great deal of money.

After losing the money, Noah was a customer of another financial institution that suffered a large security breach. Noah was one of millions of customers whose personal information was compromised. He wonders if he may have been a victim of identity theft and whether this may have negatively affected his credit.

Noah hopes that he will soon be able to put these challenges behind him, build excellent credit, and find the perfect job.

Consumers today are most likely protected from situations like the one Noah had buying stock because of which federal action or legislation?

A . The rules under the Fair Debt Collection Practices Act.
B . The creation of the Consumer Financial Protection Bureau.
C . Federal Trade Commission investigations into “unfair and deceptive” acts or practices.
D . Investigations of “abusive” acts and practices under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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Question #9

In what way is the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act intended to help consumers?

A . By providing consumers with free spam-filtering software.
B . By requiring a company to receive an opt-in before sending any advertising e-mails.
C . By prohibiting companies from sending objectionable content through unsolicited e-mails.
D . By requiring companies to allow consumers to opt-out of future e-mails.

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Correct Answer: D
D

Explanation:

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 transfer the 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

Reference: 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

Question #10

Which entities must comply with the Telemarketing Sales Rule?

A . For-profit organizations and for-profit telefunders regarding charitable solicitations
B . Nonprofit organizations calling on their own behalf
C . For-profit organizations calling businesses when a binding contract exists between them
D . For-profit and not-for-profit organizations when selling additional services to establish customers

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Correct Answer: A
A

Explanation:

The Telemarketing Sales Rule (TSR) is a federal regulation that applies to telemarketing calls, which are defined as "a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call."1 The TSR requires telemarketers to make specific disclosures, prohibit misrepresentations, limit the times and number of calls, and set payment restrictions for the sale of certain goods and services. The TSR also gives consumers the right to opt out of receiving telemarketing calls by registering their phone numbers on the National Do Not Call Registry.2

The TSR applies to both for-profit and not-for-profit organizations, but there are some exemptions and partial exemptions for certain types of entities, calls, and transactions. For example, the TSR does not apply to nonprofit organizations calling on their own behalf, as they are not considered to be engaged in telemarketing. However, if a nonprofit organization hires a for-profit telemarketer or telefunder to solicit charitable contributions on its behalf, the for-profit entity must comply with the TSR, as it is engaged in telemarketing. Similarly, the TSR does not apply to for-profit organizations calling businesses when a binding contract exists between them, as they are not considered to be inducing the purchase of goods or services. However, if a for-profit organization calls businesses to sell additional services to established customers, the TSR applies, as it is considered to be inducing the purchase of goods or services.3

Therefore, among the four options, only for-profit organizations and for-profit telefunders regarding charitable solicitations must comply with the TSR, as they are engaged in telemarketing and do not fall under any of the exemptions or partial exemptions.

Reference: 1: eCFR :: 16 CFR Part 310 C Telemarketing Sales Rule3, Section 310.22: Telemarketing Sales Rule | Federal Trade Commission1, Rule Summary3: Complying with the Telemarketing Sales Rule – Federal Trade Commission2, Exemptions to the TSR.