CIPP-US practice question 9 of 25

SCENARIO Please use the following to answer the next QUESTION: Cheryl is the sole owner of Fitness Coach, Inc., a medium-sized company that helps…

Full set: 195 questions
SCENARIO Please use the following to answer the next QUESTION: Cheryl is the sole owner of Fitness Coach, Inc., a medium-sized company that helps individuals realize their physical fitness goals through classes, individual instruction, and access to an extensive indoor gym. She has owned the company for ten years and has always been concerned about protecting customer’s privacy while maintaining the highest level of service. She is proud that she has built long-lasting customer relationships. Although Cheryl and her staff have tried to make privacy protection a priority, the company has no formal privacy policy. So Cheryl hired Janice, a privacy professional, to help her develop one. After an initial assessment, Janice created a first of a new policy. Cheryl read through the draft and was concerned about the many changes the policy would bring throughout the company. For example, the draft policy stipulates that a customer’s personal information can only be held for one year after paying for a service such as a session with personal trainer. It also promises that customer information will not be shared with third parties without the written consent of the customer. The wording of these rules worry Cheryl since stored personal information often helps her company to serve her customers, even if there are long pauses between their visits. In addition, there are some third parties that provide crucial services, such as aerobics instructors who teach classes on a contract basis. Having access to customer files and understanding the fitness levels of their students helps instructors to organize their classes. Janice understood Cheryl’s concerns and was already formulating some ideas for revision. She tried to put Cheryl at ease by pointing out that customer data can still be kept, but that it should be classified according to levels of sensitivity. However, Cheryl was skeptical. It seemed that classifying data and treating each type differently would cause undue difficulties in the company’s day-to-day operations. Cheryl wants one simple data storage and access system that any employee can access if needed. Even though the privacy policy was only a draft, she was beginning to see that changes within her company were going to be necessary. She told Janice that she would be more comfortable with implementing the new policy gradually over a period of several months, one department at a time. She was also interested in a layered approach by creating documents listing applicable parts of the new policy for each department. What is the best reason for Cheryl to follow Janice’s suggestion about classifying customer data?
Answer options
A: It will help employees stay better organized
B: It will help the company meet a federal mandate
C: It will increase the security of customers’ personal information (PI) Correct answer
D: It will prevent the company from collecting too much personal information (PI)
Correct Answer:
C. It will increase the security of customers’ personal information (PI)
Explanation

Data classification involves categorizing data based on its sensitivity and the level of protection it requires. By classifying customer data, Fitness Coach, Inc. can apply stronger security controls (e.g., stricter access controls, encryption) to more sensitive information, such as health details or payment data. This risk-based approach ensures that the most critical data receives the highest level of protection, thereby increasing the overall security of customers' personal information and mitigating potential harm from a data breach. This is the primary security and privacy purpose of data classification.

Why Incorrect

A: While it might aid organization, the primary security and privacy benefit, which is the core of the CIPP/US curriculum, is enhanced protection. B: The scenario does not mention any specific federal mandate that requires data classification for a company of this type. It is a best practice, not a universal mandate. D: Data classification is about managing and protecting data that has already been collected; it does not inherently prevent over-collection (data minimization does that).

References

1. National Institute of Standards and Technology (NIST). (2020). Security and Privacy Controls for Information Systems and Organizations (NIST Special Publication 800-53, Rev. 5). Control Family: Access Control (AC), which details how data classification and labeling are foundational to enforcing access rules.

2. International Association of Privacy Professionals. (2019). U.S. Private-Sector Privacy: Law and Practice for the CIPP/US (3rd ed.). Chapter 10, "Information Security," discusses data classification as a fundamental administrative control for protecting personal information.

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