As an appraiser, you are trusted with highly sensitive information and protecting it in your files and appraisal reports needs to be a top priority. And as the profession relies more heavily on digital documentation and technology to streamline the appraisal process, security and confidentiality become even more important. We want to address appraisal confidentiality and how to protect client information in digital spaces.
Appraisal confidentiality in USPAP
Appraisers know that appraisal reports contain confidential information and assignment results. Within USPAP, confidential information is that which is not publicly available and is identified by an applicable law or regulation. Assignment results are an appraiser’s opinions and conclusions, not limited to value, that were developed when performing an assignment.
The ETHICS RULE states that appraisers may only share confidential information or assignment results with specific entities, including:
- The client or parties specifically authorized by the client
- State appraiser regulatory agencies
- Third parties that are authorized by due process of law
- A duly authorized professional peer review committee
It is important to note that physical characteristics are not assignment results. An appraiser may share factual information about a property’s physical characteristics with other parties (including other appraisers) without violating USPAP.
Why Appraisal Confidentiality Matters
An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.
Appraisal confidentiality is not just a legal and ethical requirement for appraisers; it is also essential for a successful, long-lasting career and a good reputation. Consider these factors and how breaking confidentiality could affect them:
Client Trust
An appraisal report consists of all relevant documentation and information, as well as legal certification of compliance with USPAP. Clients expect appraisers to maintain confidentiality because the client’s interests could be harmed if an appraiser discloses confidential information or assignment results to unauthorized parties. Maintaining confidentiality helps build trust with clients, as they know their sensitive information is being handled with care.
Long-Term Liability
Appraisers are required to keep workfiles for a period of at least five years after preparation or at least two years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment. The confidential status of information and assignment results does not expire, even after the minimum record keeping period has ended. Ensuring appraisal confidentiality protects both the appraiser and their clients from future liability.
Professional Integrity
Maintaining confidentiality demonstrates a commitment to professional integrity and ethics. It shows that the appraiser takes their responsibilities seriously and is dedicated to providing high-quality services.
Appraisal Confidentiality Risks in the Digital Age
The ETHICS RULE in USPAP states, “An appraiser must take reasonable steps to safeguard access to confidential information and assignment results by unauthorized individuals, whether such information or results are in physical or electronic form.” Protecting physical information can be as simple as keeping your files locked in a cabinet and restricting access, but digital information is harder to protect.
With the widespread use of digital tools and platforms, the risk of data breaches increases. Small businesses are frequently targeted with malware that steals data, so you need to take extra care to prioritize confidentiality and protecting client information, especially from unauthorized users.
Protecting Your Client’s Information
To ensure confidentiality, consider the following best practices:
Stay Updated
It’s easy to hit “Update later,” but software updates frequently have patches that protect against security vulnerabilities. Failing to update your software and apps regularly and when needed can provide openings for hackers to deliver malware or steal data.
Secure Data Storage
Store appraisal reports and other sensitive information on secure servers or cloud storage services that offer encryption and access controls. Access controls are settings used to determine who has access to your files. Ensuring you have limited outside access to your reports is crucial for protecting information.
If two-factor authentication (2FA) is available, your software will give you the option to send a text message to you to verify identity whenever you log in to access your files. It may seem like an unnecessary extra step, but that extra step goes a long way toward protecting confidential data.
Use Secure Communication Channels
When communicating with clients or colleagues, use encrypted email services and secure messaging platforms to protect sensitive information from unauthorized access. When setting up a Wi-Fi network, use a strong, unique password to protect your internet connection, and consider using a Virtual Private Network (VPN) to ensure that all communications and data transferred is secure and encrypted, too.
Don’t use AI to write reports or emails
ChatGPT seems like a time-saver when you need to quickly compile notes and data into a streamlined report. However, using ChatGPT and other AI services to write reports could be a breach of confidentiality because these services recycle all information users submit across the internet for use in other reports and assignments.
Be Wary of Phishing
Phishing is a common type of spam that targets individuals through email, text messages, phone calls, aiming to obtain financial information, system login credentials, or other sensitive information from the recipient. Be cautious of emails, messages, or phone calls asking for personal information. Verify the source is genuine before providing any information and limit access to only those who need it.
Take the next step with an Unlimited CE Membership
Whether you want to learn more about technology to support your business or take other continuing education classes, our Unlimited CE Membership has everything you need. You’ll get unlimited access to our entire CE catalog, including the 7-hour USPAP Update, niche certification courses, and over 400 resource materials.
