How to Audit a Client’s Privacy Notice Like a Regulator Would

By Ramyar Daneshgar
Security Engineer & Analyst at CybersecurityAttorney.com

Disclaimer: This article is for educational purposes only and does not constitute legal advice.

In the eyes of the Federal Trade Commission (FTC) and California Privacy Protection Agency (CPPA), a privacy notice is a public declaration about how a company handles personal data. And if that declaration is unclear, misleading, or inconsistent with how the business actually operates, it can trigger serious enforcement.

Unlike data breaches, which involve external threats, these investigations often begin with nothing more than a misleading sentence in a privacy policy. Two recent cases—FTC v. BetterHelp and FTC v. GoodRx—demonstrate this shift. Neither case involved a traditional breach. Instead, both hinged on privacy policies that misrepresented data practices.

This article serves as walkthrough for privacy professionals tasked with reviewing or drafting privacy notices. It translates backend data flows and platform behavior into risk language a regulator would understand. Each section includes specific audit strategies and verification methods, concluding with a compliance checklist.

What Regulators Expect in a Privacy Notice

Under the California Privacy Rights Act (CPRA) and FTC guidance, privacy notices must address the following elements in clear, accurate, and specific language:

Categories of Personal Information Collected

Businesses must list the categories of personal data they collect, referencing standardized classifications such as those defined in Cal. Civ. Code §1798.140(v). Examples include identifiers (name, email,etc), geolocation, internet activity, biometric data, and sensitive personal information (SPI).

Purpose for Collection and Use

Each data category must be mapped to a legitimate, disclosed business purpose. For instance, contact information may be collected for account registration, while device identifiers may be used for fraud prevention.

Sale or Sharing of Data

If data is transferred to third parties—especially in contexts like advertising or analytics—it must be disclosed. Under CPRA, “sharing” specifically includes cross-context behavioral advertising.

The notice must specify:

• Whether data is “sold” as defined by CPRA (exchanged for monetary or other valuable consideration)
• Whether data is “shared” (used for cross-context behavioral advertising)
• What third-party categories receive the data (ad networks, analytics providers, service providers)
• A clear and functional “Do Not Sell or Share My Personal Information” link for opt-out.

Retention Periods

Companies must disclose how long they retain each category of data or the criteria used to determine the retention period. General statements like “as long as needed” are insufficient.

• The notice must:Disclose retention periods for each category of PI and SPI, orState the criteria used to determine the retention periodReflect actual deletion schedules across internal systems and vendor contracts

Consumer Rights and Submission Methods

Privacy notices must inform users of their rights under applicable law (access, correction, deletion, restriction) and provide clear instructions for submitting a request.

The privacy notice must inform users of:

• The right to know/access, delete, correct, and opt out of the sale or sharing of personal data
• The right to limit the use and disclosure of sensitive personal information
• Methods to exercise these rights (web form, toll-free number, email, in-app interface)
• Information on response timelines, identity verification procedures, and appeal rights where applicable

Use of Sensitive Personal Information

If SPI is used to infer characteristics about a user (health status, financial distress), users must be given the ability to restrict such use.

• The privacy notice must:
  • Identify third-party recipients (by name or category)
  • Describe their role: service provider, contractor, or third party
  • Disclose the business purpose of the data transfer
  • Be supported by Data Processing Agreements (DPAs), subprocessor lists, and service provider obligations that restrict secondary use

The FTC adds a general standard: any claim made to consumers—whether in a policy, application, or marketing material—must be truthful and substantiated. Misleading omissions or implications may be treated as deceptive under Section 5 of the FTC Act.

Section-by-Section Audit Guide

1. Data Categories Disclosed

• Compliance Requirement: Enumerate all categories of personal data collected using CPRA-aligned terms.
• Risk Area: Generic language like “we collect your information” does not meet statutory precision requirements.
• Audit Method: Cross-reference privacy policy with internal data inventories and engineering documentation.

2. Purpose for Collection

• Compliance Requirement: State the business purpose for collecting each category of information.
• Risk Area: Vague justifications (“improving the website”) are often insufficient without additional context.
• Audit Method: Validate stated purposes with actual product workflows and feature documentation.

3. Sale or Sharing Disclosures

• Compliance Requirement: Clearly state whether data is sold or shared and provide mechanisms to opt out.
• Risk Area: Failing to disclose use of advertising SDKs, pixel tags, or API-based integrations.
• Audit Method: Conduct a technical scan of the website/app environment; review vendor contracts and data flows.

4. Retention Periods

• Compliance Requirement: List data retention timeframes or provide specific criteria.
• Risk Area: Use of default or boilerplate language without connection to internal data lifecycle practices.
• Audit Method: Review backend retention schedules, auto-deletion rules, and storage configurations.

5. Consumer Rights and Submission Methods

• Compliance Requirement: Describe consumer rights and how to exercise them.
• Risk Area: Inaccessible or nonfunctional rights request forms; lack of a response tracking process.
• Audit Method: Test rights request interfaces and verify fulfillment processes through internal SOPs.

6. Third-Party Disclosures and Contracts

• Compliance Requirement: Identify third-party recipients and describe their role (processor vs. controller).
• Risk Area: Grouping disparate service providers under undefined terms like “partners.”
• Audit Method: Review vendor risk assessments, ensure all third-party data recipients are under valid DPAs.

Audit Checklist

Conclusion

A privacy notice must accurately reflect the full lifecycle of personal data collected by a business. Cybersecurity professionals play critical role in verifying that public-facing documents are not only compliant on their face, but also accurate representations of operational practices. Conducting a thorough audit means translating engineering, marketing, and third-party data flows into concrete, verifiable disclosures. Regulatory expectations are evolving—especially for companies in sensitive sectors—and the margin for error continues to narrow. A defensible privacy policy begins with a line-by-line audit and ends with enforceable internal alignment.

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