Applied Knowledge & Practice Flashcards

A prospect meets face-to-face with a debt relief representative before agreeing to enroll, without any telemarketing. How does this affect TSR coverage?

Answer: The TSR generally does not apply to transactions completed in a face-to-face presentation before payment is required

The TSR exempts sales where there is a face-to-face presentation before the consumer is charged, though state law and FTC Act still apply.

A client asks if a partial payment on a very old debt could have consequences. What is the most accurate response?

Answer: In some states, a partial payment or written acknowledgment can restart the statute of limitations

Depending on state law, payment or acknowledgment may revive or restart the statute of limitations on collection.

Which statement correctly contrasts a debt management plan (DMP) with debt settlement?

Answer: A DMP typically repays the full principal with reduced interest, while settlement seeks to pay less than the full balance

DMPs negotiate lower interest and fees on full principal, while settlement negotiates reduced lump-sum or installment payoffs.

A client's enrolled credit card has been delinquent for about 180 days. What commonly occurs at this point?

Answer: The creditor typically charges off the account, though the debt is still owed

Credit card issuers typically charge off accounts around 180 days delinquent, but the debt remains collectible.

Which disclosure must be made regarding the consequences of not paying creditors during the program?

Answer: That the program may adversely affect creditworthiness, may result in collection actions or lawsuits, and may increase balances through fees and interest

The TSR requires disclosure that failing to pay creditors may hurt credit, lead to collections or suits, and raise balances.

A client with federal student loans asks to enroll them in a settlement program. What is the best response?

Answer: Federal student loans are generally not suitable for settlement programs; refer the client to federal repayment options

Federal student loans have their own repayment, consolidation, and forgiveness options and are rarely settled through programs.

An agent records an inbound call from a consumer who responded to a general TV ad about debt relief. Does the TSR's general media inbound exemption protect this call?

Answer: No, debt relief services are excluded from the general media advertising exemption

The 2010 TSR amendments removed the general media exemption for inbound calls about debt relief services.