New Nevada legislation went into effect on October 1st that may affect real estate practitioners. The law reads:
NRS 597.970 Restrictions on transfer of personal information through electronic transmission. 1. A business in this State shall not transfer any personal information of a customer through an electronic transmission other than a facsimile to a person outside of the secure system of the business unless the business uses encryption to ensure the security of electronic transmission. 2. As used in this section: (a) "Encryption" has the meaning ascribed to it in NRS 205.4742. (b) "Personal information" has the meaning ascribed to it in NRS 603A.040.
The "Personal Information" criteria is pretty much what you would expect, a person's name connected with any of the following: a. Social Security number, b. Driver's license number or identification card number, c. Account number, credit or debit card number in combination with security or access code or password.
"Encryption" requirements, however, are quite vague. "Encryption" means the use of any protective or disruptive measure including without limitation, cryptography, enciphering, encoding, or a computer contaminant to: 1. Prevent, impede, delay or disrupt access to any data, information, image, program, signal or sound; 2. Cause or make any data, information, image, program, signal or sound unintelligible or unusable, or; 3. Prevent, impede, delay or disrupt the normal operation or use of any component, device, equipment, system or network."
The definition of "customer" and "business" may yet be challenged, but it is clear that we must protect our customers from personal information predators if we possess confidential information. That is basic common sense and comes with the fiduciary relationship the agent has with a client. That will certainly trigger the client vs. customer debate that agents and attorneys continually find themselves engaged in.
Our advice: Real estate agents must be careful so as to not innocently violate this new law. Some Buyers have their Social Security Number on their Earnest Money Deposit Check. If the agent emails the Listing Agent a copy of such a check along with the Purchase Agreement he has violated this law. If the agent faxes the same check he is in compliance, but what about the new e-fax systems used by agents? The fax is converted and delivered via email to the recipient. Technically, the agent faxed it. Realistically, the agent emailed it. Satisfying the "letter of the law" but breaking the "spirit of the law"? Is this a violation? Only court cases will tell us for sure. Penalties for violation are not established and will likely only be established by civil court decisions on a case specific basis.
Regardless of language and law, an agent should always protect the customer/client. Think before transmitting documents - even if providing a service by emailing a loan application for the borrower - you could be breaking the law. Protect their information as if it were your own ... just as you handle their negotiations... and you and your customers will stay out of court. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, firstname.lastname@example.org, www.carsonvalleyland.com