Trying to keep up with all the various U.S. data privacy laws is enough to make anyone’s head spin. With the absence of U.S. federal regulation, organizations are required to stay informed of privacy laws on a state-by-state basis. If that weren’t challenging enough, data is categorized into numerous categories with various acronyms like NPI, PII, PHI, SPI and more. Let’s break down two significant data types that are often discussed in third-party risk management – NPI and PII.
Nonpublic personal information (NPI) and personally identifiable information (PII) are two types of data that are often confused with each other. In this blog, we’ll explain how they differ and review some best practices to ensure that this information is protected in your third-party risk management program.
An Understanding of NPI
The Federal Trade Commission (FTC) defines nonpublic personal information (NPI) in the Gramm-Leach-Bliley Act , which was enacted in 1999. According to the FTC, NPI includes any information that an individual provides to obtain a financial product or service, unless that information is otherwise "publicly available". It can also include information obtained from a transaction or in connection with providing a financial product or service.
The following are just some examples of NPI:
- Names
- Addresses
- Income information
- Social Security numbers
- Data submitted on an application
- Account numbers
- Payment history
- Court records
The FTC does make a distinction as to what can be considered “publicly available” and therefore NOT nonpublic personal information. If an individual is aware that their personal information is legally available to the public and hasn’t taken action to make it nonpublic, that information would not be considered NPI. For example, a telephone number in a public directory wouldn’t be categorized as NPI.

The Broad Scope of PII
The Department of Homeland Security and Department of Labor are two agencies that have defined personally identifiable information (PII), which is more broad in scope than NPI. PII is also at the foundation of the 2018 California Consumer Privacy Act (CCPA). In general, PII refers to any information that allows the identity of an individual to be indirectly or directly inferred.
The following are some examples of PII:
- Names
- Addresses
- Social Security numbers
- Telephone numbers
- Email addresses
- Purchase history
- Internet browsing history
- Fingerprints
- Combination of gender, race, birth dates and/or geographic indicators
Similar to NPI, certain data types are NOT considered PII, such as licenses or property records that are made publicly available through the government.

Protecting Consumer Data in Third-Party Risk Management
It’s more important than ever to ensure that your vendors are properly safeguarding your customers’ NPI and PII. As third-party cybersecurity incidents continue to rise, make sure your vendors are prepared to prevent, detect and respond to an event. The following components of your vendor’s cybersecurity posture should be assessed:
- Prevention: Vendors that have access to NPI or PII should be performing security testing on internal and external vulnerabilities and penetration and social engineering at least annually. This will identify any weaknesses that can be resolved before they’re exploited.
- Detection: No organization will be completely protected from cybersecurity incidents, so it’s important that you understand your vendor’s detection and notification process to ensure that it’s both timely and effective.
- Response: Your vendor’s incident management plan should be thoroughly assessed so you understand how they’ll respond when an incident occurs. The confidentiality, integrity and availability of your customers’ NPI and PII will be greatly impacted by how quickly and effectively the vendor responds to and resolves an incident.
Reviewing your vendors’ cybersecurity program isn’t only a best practice to protect your customers’ information; it’s also a regulatory expectation. Data privacy will likely continue to be a hot topic in emerging legislation, so it’s important that your organization understands how its vendors are protecting customer information.