Ch. 9 - Financial Privacy Quiz Flashcards

Question

According to the GLBA (Gramm-Leach Bliley Act) Safeguards Rule, all of the following types of security are required except: A. technical security B. physical security C. access security D. administrative security

Answer 1

C. access security

Answer 2

C. risk assessments

Answer 3

B. individuals

Answer 4

A. the Financial Services Modernization Act

Answer 5

A. all Financial Institutions C. consumer reporting agencies D. any entities that handle financial information

Answer 6

B. Disclosure of financial information to affiloated and non-affiliated third parties

Answer 7

c. any individual with a long-standing relationship with a financial institution

Answer 8

C. all information not part of the public record

Answer 9

A. Customers must receive a copy of the financial institution's privacy notice annually B. An employee must be designated to ensure enforcement of the Safeguards Rule D. Financial account numbers may not be shared with nonaffiliated third parties

Answer 10

B. employee training C .encryption D. disaster recovery plans

Answer 11

B. Usage of third-party data for employment screening is prohibited under the FCRA.

Answer 12

A) GLBA Explanation: The Gramm-Leach-Bliley Act (GLBA) includes privacy provisions for individuals and provides opt-out methods to restrict information sharing with third-party firms.

Answer 13

A. the Financial Services Modernization Act

Answer 14

A. all Financial Institutions C. consumer reporting agencies D. any entities that handle financial information

Answer 15

B. Disclosure of financial information to affiloated and non-affiliated third parties

Answer 16

C. all information not part of the public record

Answer 17

A. Customers must receive a copy of the financial institution's privacy notice annually B. An employee must be designated to ensure enforcement of the Safeguards Rule D. Financial account numbers may not be shared with nonaffiliated third parties

Answer 18

B. employee training C .encryption D. disaster recovery plans

Answer 19

C. any individual with a long-standing relationship with a financial institution

Answer 20

A. information collection B. information disclosure C. information use The Fair Credit Reporting Act (FCRA) is a federal law that helps to ensure the accuracy, fairness and privacy of the information in consumer credit bureau files. The law regulates the way credit reporting agencies can collect, access, use and share the data they collect in your consumer reports.?

Answer 21

A. 1 The federal Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 and following) regulates "consumer reporting agencies" and "consumer reports." You have certain rights under the FCRA, including the right to access your credit file, the right to correct any inaccuracies in your credit reports, the right to seek damages against those who violate the law The FCRA requires consumer reporting agencies to adopt reasonable procedures for gathering, maintaining, and distributing information. Regulations under the FCRA, effective as of July 1, 2010, require anyone furnishing information to consumer reporting agencies, including original creditors and debt collectors, to have reasonable policies and procedures for ensuring the accuracy and integrity of the information they report. The FCRA also regulates who can access credit reports. A credit reporting agency can provide information about you only to people with a valid reason. The FCRA specifies those with a valid need for access, like creditors, potential creditors, insurers, employers, landlords, and certain other businesses, such as utility companies. Under the FCRA, you have the right to dispute both the accuracy and the completeness of items in your file, not just inaccurate information. The distinction between accuracy and completeness can be important. For example, your credit report might state accurately that a creditor sued you. But this information might be incomplete because you later paid the debt, or were not actually liable for it. You can dispute the information about the lawsuit because it is incomplete. Inaccurate, incomplete, or unverifiable information usually has to be removed or corrected within 30 or 45 days. In most cases, a consumer reporting agency may not report negative information that is more than seven years old or bankruptcies that are more than ten years old. You have the right to get all the information about you contained in the files that a consumer reporting agency prepared, called a "file disclosure." Sometimes the file disclosure is free; other times, you might have to pay a fee. You can get one free credit report every 12 months upon request from each nationwide credit reporting agency. You can also get a free file disclosure in certain situations, like if: someone takes an adverse action against you, like denying you credit, because of information in your credit report (you must ask for your report within 60 days after you receive notice about the adverse action) you're a victim of identity theft, and you've put a fraud alert in your file your file has inaccurate information because of fraud you're on public assistance, or you're unemployed, but you plan to apply for employment within 60 days. If someone uses your credit report or another type of consumer report to take some other adverse action against you—like denying your application for credit, insurance, or employment—they must let you know. They also have to give you the name, address, and telephone number of the agency that provided the information. Employers Must Get Your Consent Before Getting Your Credit File A consumer reporting agency generally can't give your file to your employer, or a potential employer, without your written consent. You May Seek Damages From FCRA Violators The FCRA lets you sue a credit reporting agency (or other person or entity that violates the law) for negligent or willful noncompliance with the law within two years after you discover the harmful behavior or within five years after the harmful behavior occurs, whichever is sooner. Identity Theft Victims and Active-Duty Military Personnel Have Certain Rights The FCRA provides certain rights for victims of identity theft and military personnel. For example, identity theft victims may ask businesses for a copy of transaction records (like credit applications) relating to the theft. Military personnel may place an active duty alert on their credit reports.

Answer 22

C. Fair Credit Reporting Act The Fair and Accurate Credit Transactions Act of 2003 (“FACT ACT” or “FACTA”) was Congress' second major amendment and expansion of the FCRA.

Answer 23

C. identity fraud The Fair and Accurate Credit Transactions Act of 2003 (“FACTA”) added to the FCRA significant provisions designed to prevent identity theft, control the consequences of identity theft to victims' credit records, and help victims cleanse their credit records of identity-theft related information.

Answer 24

C. Glass-Steagall Act The Financial Services Modernization Act of 1999, otherwise known as the Gramm-Leach-Bliley Act (“GLBA”), repealed banking regulations from the 1930s – the Glass-Steagall (1933) and the Bank Holding Company Act (1956). Those laws prevented the merger of commercial banks, stock brokerage companies, and insurance companies. GLBA also introduced the Financial Privacy Rule and the Safeguards Rule, which required financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data, respectively. In enacting GLBA, Congress aimed to “modernize” the financial services industry. By annulling Glass-Steagall and Bank Holding Company Act protections, GLBA encouraged consolidation in the financial services industry. Financial services companies created financial holding companies, which were now overseen by the Federal Reserve.[1] Experts continue to debate the lasting effects of this act. Critics often argue that GLBA contributed to the financial crisis of 2008 by deregulating the banking sector and removing restrictions on commercial bank securities activities. GLBA supporters contend that not passing GLBA, or later repealing it, would not have prevented the financial crisis, which resulted from bad investments by large, poorly capitalized financial institutions.[2]

Answer 25

A. details what information the institution will collect about the customer B. details how information collected about the customer will be shared with outside parties C. details how the institution will protect the information it collects about the customer Financial institutions covered by the Gramm-Leach-Bliley Act must tell their customers about their information-sharing practices and explain to customers their right to "opt out" if they don't want their information shared with certain third parties. The Gramm-Leach-Bliley Act (GLBA) includes provisions designed to address concerns over how consumer data would be collected, used, and shared among financial institutions. The GLBA’s privacy provisions mandate privacy notices and place limitations on the sharing of nonpublic personal information (NPI), defined as “personally identifiable financial information (i) provided by a consumer to a financial institution, (ii) resulting from a transaction or any service performed for the consumer, or (iii) otherwise obtained by the financial institution.”1 The financial institutions subject to the GLBA encompass any entities that are significantly engaged in financial activities, including banks, insurance providers, securities firms, mortgage lenders, and others.2 The GLBA’s privacy protections generally apply to consumers, i.e., individuals who obtain financial products or services from a financial institution primarily for personal, family, or household purposes, while some requirements apply to customers, i.e., consumers with whom the organization has an ongoing relationship.3 The GLBA privacy rules, as enforced by the various regulators, generally require:Clear and conspicuous notice of the financial institution’s information-sharing policies and practices, including what information it collects and with whom it shares the information. Covered institutions may use a model privacy form published by regulators as a safe harbor. The privacy notice must be provided when a customer relationship is established, and annually thereafter unless the financial institution does not engage in any sharing for which customers have the opportunity to opt out and there have been no changes in policy or practice since the previous privacy notice.4 Providing customers the right to opt out of having their nonpublic personal information shared with nonaffiliated third parties, subject to a number of significant exceptions, including for joint marketing, processing consumer transactions, and service providers. Financial institutions must process opt-outs within 30 days.5 Refraining from disclosing account numbers or similar forms of access codes to any nonaffiliated third parties for marketing purposes, with certain narrow exceptions, such as for joint marketing arrangements.6 The following is a list of disclosures regarding nonpublic personal information that institutions must provide in their privacy notices, as applicable: 1. categories of information collected; 2. categories of information disclosed; 3. categories of affiliates and nonaffiliated third parties to whom the institution may disclose information; 4. policies and practices with respect to the treatment of former customers’ information; 5. categories of information disclosed to nonaffiliated third parties that perform services for the institution or functions on the institution’s behalf and categories of third parties with whom the institution has contracted (Section 13); 6. an explanation of the opt out right and methods for opting out; 7. any opt out notices that the institution must provide under the FCRA with respect to affiliate information sharing; 8. policies and practices for protecting the security and confidentiality of information; and 9. a statement that the institution makes disclosures to other nonaffiliated third parties for everyday business purposes or as permitted by law (Sections 14 and 15).

Answer 26

B. after a business arrangement is agreed upon Consumers who are not customers are entitled to an initial privacy notice before the financial institution shares nonpublic personal information with a nonaffiliated third party under the A financial institution must provide an initial notice of its privacy policies and practices to each customer, not later than the time a customer relationship is established.

Answer 27

B. opt out

Answer 28

A. Consumers have the ability to access and correct their information C. Use of consumer reports is limited to “permissible purposes

Answer 29

A. Appropriate formal written request from an authorized government authority B. Appropriate administrative subpoena or summons C. Qualified search warrant E. Customer authorization F. Appropriate judicial subpoena

Answer 30

B. Consumer Financial Protection Bureau (CFPB)

Answer 31

A. Fair and Accurate Credit Transactions Act

Answer 32

C. Identity theft

Answer 33

C. Receipts are not allowed to reveal a full credit card # or debit card #. One of the requirements is that a credit card # cannot be shown fully on a receipt. This prevents risking identity theft if the receipt falls in the wrong hands.

Answer 34

D. Requires insurance against Identity Theft. Red Flag Rule • Required agencies that regulate financial entities to develop a set of rules to mandate the detection, prevention & mitigation of identity theft • Eliminates entities that extend credit only “for expenses incidental to a service” • Authorizes regulations that apply the rule to businesses whose account should be “subject to a reasonably foreseeable risk of identity theft"

Answer 35

A. Sellers are required to update their call lists annually - the call lists are required to be required every 31 days

Answer 36

A. The Fair and Accurate Credit Transactions Act The Fair and Accurate Credit Transactions Act (FACTA) of 2003 • Stricter state laws are preempted in most areas although states retain some powers are preempted in most areas, although states retain some powers to enact laws addressing identity theft • Required truncation of credit and debit card numbers, so that receipts do not reveal the full credit or debit card number

Answer 37

Consumer Reporting Agencies

Answer 38

C. Receipts are not allowed to reveal a full credit card # or debit card #. One of the requirements is that a credit card # cannot be shown fully on a receipt. This prevents risking identity theft if the receipt falls in the wrong hands.

Answer 39

D. Requires insurance against Identity Theft. Red Flag Rule • Required agencies that regulate financial entities to develop a set of rules to mandate the detection, prevention & mitigation of identity theft • Eliminates entities that extend credit only “for expenses incidental to a service” • Authorizes regulations that apply the rule to businesses whose account should be “subject to a reasonably foreseeable risk of identity theft”

Answer 40

A. What is collected B. With whom information is being shared C. How information will be safeguarded D. How consumers can opt out

Answer 41

A. Confidentiality B. Laws and regulations C. Security

Answer 42

C. the Financial Services Modernization Act of 1999.

Answer 43

A. Requires financial companies to adequately secure information B. Requires financial companies to provide consumers with privacy statements C. Requires financial companies to offer consumers the ability to opt out of receiving non-affiliated third party offers.

Answer 44

A. Fair and Accurate Credit Transactions Act

Answer 45

A. Only certain US laws require a privacy notices. | C is false and B is true depending on the type of website

Answer 46

C. Identity theft

Answer 47

a. Non-consumer-initiated transaction

Answer 48

c. Any person or entity that compiles or evaluates personal information for the purpose of furnishing consumer reports to third parties for a fee

Answer 49

d. All of the above

Answer 50

b. Consumer reports may be used only for credit purposes

Answer 51

d. All of the above

Answer 52

c. Notice to a consumer when third-party data is used to make adverse decisions about them is optional

Answer 53

a. 7 years or older for most information, and 10 years or older for bankruptcies

Answer 54

b. Provide consumer assistance as outlined in DOJ rules

Answer 55

d. All of the above

Answer 56

c. Dispute resolution, private litigation, and government actions

Answer 57

b. State Attorneys General

Answer 58

d. Only a and c

Answer 59

c. Statement regarding the consumer’s right to obtain a free disclosure of the consumer’s file from the CRA if requested within 30 days

Answer 60

a. Statement the CRA did not make the adverse action but may provide limited details about the reason for the action

Answer 61

b. Clear and accurate disclosure of the consumer’s right to be informed of the nature of the information that was relied upon, if the consumer requests it within 60 days

Answer 62

d. All of the above

Answer 63

a. 30 days from the date of the request

Answer 64

c. Within a reasonable time period

Answer 65

d. All of the above

Answer 66

b. Provide a copy of the consumer report to the consumer, along with a summary of the consumer’s rights received from the CRA

Answer 67

d. All of the above

Answer 68

c. Must provide credit scores and other information about credit scores to applicants

Answer 69

a. Risk-based pricing notice

Answer 70

c. Consumer may not prohibit the use of their information in their credit file for future prescreened offers

Answer 71

d. All of the above

Answer 72

b. All other entities that hold a transaction account belonging to a consumer

Answer 73

d. Only a and b

Answer 74

c. Medical clinic that allows customers to pay off bills in monthly installments

Answer 75

a. Entities that extend credit only for expenses incidental to service

Answer 76

d. All of the above

Answer 77

b. Normal use of a covered account

Answer 78

c. Data-sharing relationships between banks and third-party marketers, and consumer choice

Answer 79

d. All of the above

Answer 80

b. A business significantly engaged in financial activities

Answer 81

d. All of the above

Answer 82

c. Publicly available information

Answer 83

a. Information from a consumer list that is derived without using personally identifiable information

Answer 84

d. All of the above

Answer 85

a. Designated employee for writing procedures

Answer 86

d. All of the above

Answer 87

c. Affiliated parties in the same line of business

Answer 88

b. Sentence offenders for criminal actions

Answer 89

d. All of the above

Answer 90

d. Only a and c