Affiliate Broker Tennessee (TN PSI) National Practice Exam `

What is true regarding the security of client information?

1. Client data is always safe regardless of system security

2. Client data can be compromised if the brokerage's computer system is exposed

3. Confidentiality is guaranteed by law

4. Home inspections prevent data breaches

The correct answer is: Client data can be compromised if the brokerage's computer system is exposed

Client data can indeed be compromised if the brokerage's computer system is exposed. This highlights the importance of robust cybersecurity measures and protocols to protect sensitive information from unauthorized access. A brokerage's computer systems are the gateways through which client information is processed and stored, making them a target for cyberattacks. If these systems are not adequately secured—whether through outdated software, lack of encryption, or insufficient user access controls—there is a significant risk of data breaches. While confidentiality has legal protections, such as the Privacy Rule under the Gramm-Leach-Bliley Act, which governs how personal data should be handled, it does not equate to an absolute guarantee of security. Similarly, while home inspections are crucial in evaluating property condition, they do not address the cybersecurity aspects of data protection. Understanding these issues emphasizes the critical need for real estate professionals to prioritize cybersecurity to safeguard client data from potential threats.