A licensee keeps client contact details, income and asset information, and transaction records in a cloud-based customer relationship management system supplied by an outside vendor. What is her legal obligation for that stored data?
Correct Answer
A) She must safeguard the information with reasonable security measures and comply with the privacy laws that apply to it
A licensee who collects client information owes a duty of confidentiality and a duty to protect it with reasonable safeguards, such as access controls, strong authentication and encryption, along with compliance with whatever state and federal privacy and breach-notification laws apply. Using an outside vendor allocates the work, not the duty. That obligation coexists with record retention rules, which require transaction records to be kept for a set period after closing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
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