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August 29, 2014

How's Your PII Data Awareness?

It is time to come up to speed with your awareness of PII and its impact on real estate practices.


REALTOR® University recently launched a 4-hour online training course for REALTORS® and Association and MLS staff on privacy and data security. “Enhance Your Brand & Protect Your Clients with Data Privacy & Security.” This Data Security and Privacy Course aim to educate real estate associations, brokers, agents, and multiple listing services about the need for data security and privacy; and to assist them in complying with legal responsibilities.


In a NAR Legal Update presentation, NAR Associate General Counsel Ralph Holmen made these key points on Data Security and Privacy:

 • Not just an issue for “big companies.”
 • Every brokerage office maintains personally identifiable information (PII).
 • Extensive state regulation of collection and retention of PII
 • Most states address collection, disposal, and breach notification of PII.
 • Some real estate license regulations address licensees securely maintaining and destroying records, including transaction docs.

    • Tennessee regulation requires principal brokers to develop and utilize a retention schedule.
    • South Dakota applies a policy describing 11 requirements for safeguarding electronically stored records.

 

 • No Federal data security, privacy, and breach notification laws yet, but being considered.
 

 • What is personally identifiable information?
 

 • Defined by state law, but means:


First name/initial and last name in combination with any of the following:
Social Security Number
Driver’s license or state-issued ID number
Financial account number
Medical/health information

 

 • Social Security Numbers found in:
    • Sales contracts
    • Credit/background checks on renters
    • W9s (collected by listing brokers from individuals receiving more than $600 cooperating commission)

 

 • Driver’s license or state-issued ID numbers found in:
    • Clients’ driver’s licenses (collected as a safety precaution)
    • Rental applications; credit/background checks

 

 • Financial account number found in:
    • Personal checks were given as earnest money
    • Mortgage account number on HUD-1
    • Credit/background checks on renters
    • Earnest money checks

 

• Other:
    • Employee/agent records maintained in HR files contain many PII elements
    • Copies of loan documents or credit card payments related to transaction even without asking clients to

      

 • Where is PII stored?
 
 • Broker email systems and networks
 
 • Scanners, copiers, and fax machines
 
 • Agents’ personal email
 
 • Agents’ mobile text
 
 • Agents’ personal home computer/laptop
 
 • Cloud storage facilities
 
 • Physical file cabinets

 

 • What’s the cost of a breach?

 • Operational time spent investigating the breach and working with law enforcement
 

 • Cost of breach notification (avg. $194 per record)
 

 • Civil penalties
 

 • Annual audit/reporting requirements
 

 • Negative public perception
 

 • Potential future liability (i.e., ID theft)
 

Five Step Program –
http://www.realtor.org/articles/five-steps-towards-achieving-data-security
 

 • Take Stock
 

 • Scale Down
 

 • Lock it Down
 

 • Pitch It
 

 • Plan Ahead
 

 • NAR Resources:
 

 • Five Steps towards Achieving Data Security
 

 • http://www.realtor.org/articles/five-steps-towards-achieving-data-security
 

 • Data Security and Privacy page on REALTOR®.org
 

 • http://www.realtor.org/topics/data-privacy-and-security
 

 • Data Security Video
 

 • http://www.realtor.org/videos/data-privacy-be-ahead-of-the-law


    • NAR Data Security and Privacy Toolkit
      http://www.realtor.org/law-and-ethics/nars-data-security-and-privacy-toolkit

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