Question 1

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.

Upon review, the data privacy leader discovers that the Company’s documented data inventory is obsolete.

What is the data privacy leader’s next best source of information to aid the investigation?

Options :

A : Reports on recent purchase histories

B : Database schemas held by the retailer

C : Lists of all customers, sorted by country

D : Interviews with key marketing personnel

Answer: C

Question 2

Acme Student Loan Company has developed an artificial intelligence algorithm that determines whether an

individual is likely to pay their bill or default. A person who is determined by the algorithm to be more likely

to default will receive frequent payment reminder calls, while those who are less likely to default will not

receive payment reminders.

Which of the following most accurately reflects the privacy concerns with Acme Student Loan Company using

artificial intelligence in this manner?

Options :

A :

If the algorithm uses risk factors that impact the automatic decision engine. Acme must ensure that the

algorithm does not have a disparate impact on protected classes in the output.

B :

If the algorithm makes automated decisions based on risk factors and public information, Acme need not

determine if the algorithm has a disparate impact on protected classes.

C :

If the algorithm’s methodology is disclosed to consumers, then it is acceptable for Acme to have a

disparate impact on protected classes.

D :

If the algorithm uses information about protected classes to make automated decisions, Acme must

ensure that the algorithm does not have a disparate impact on protected classes in the output.

Answer: B

Question 3

Which entities must comply with the Telemarketing Sales Rule?

Options :

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

Answer: D

Question 4

If an organization certified under Privacy Shield wants to transfer personal data to a third party acting as an

agent, the organization must ensure the third party does all of the following EXCEPT?

Options :

A : Uses the transferred data for limited purposes

B : Provides the same level of privacy protection as the organization

C : Notifies the organization if it can no longer meet its requirements for proper data handling

D : Enters a contract with the organization that states the third party will process data according to the consent agreement

Answer: D

Question 5

Which of the following is an important implication of the Dodd-Frank Wall Street Reform and Consumer

Protection Act?

Options :

A : Financial institutions must avoid collecting a customer’s sensitive personal information

B :

Financial institutions must help ensure a customer’s understanding of products and services

C : Financial institutions must use a prescribed level of encryption for most types of customer records

D : Financial institutions must cease sending e-mails and other forms of advertising to customers who opt out of direct marketing

Answer: B

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