Communication & Stakeholder Engagement Flashcards

Which disclosure about the dedicated account is required when a provider asks a consumer to save funds for settlements?

Answer: The consumer owns the funds and any interest and may withdraw at any time without penalty

The TSR requires that the consumer owns the funds and interest and can withdraw at any time without penalty.

A client wants to cancel and asks about their dedicated account balance. Within what time frame must remaining funds be returned under the TSR?

Answer: 7 business days, less fees properly earned

Upon withdrawal, the consumer must receive funds within 7 business days, minus fees earned in compliance with the rule.

Which communication is a misrepresentation that could violate the TSR?

Answer: Most of our clients become debt-free in 12 months guaranteed

Guarantees and unsubstantiated success claims are prohibited misrepresentations.

A client asks if forgiven debt has tax consequences. What is the most accurate response?

Answer: Forgiven debt may be taxable income, and the client may get a Form 1099-C, so they should consult a tax professional

Canceled debt of $600 or more is usually reported on Form 1099-C and may be taxable unless an exclusion such as insolvency applies.

Which practice best builds trust with creditors during negotiations?

Answer: Providing accurate hardship documentation and offering only amounts available in the client's account

Credible, fundable offers backed by documentation lead to more settlements and better creditor relationships.

Before accepting a settlement on a client's behalf, what must happen?

Answer: The client must agree to the settlement terms

The TSR requires the consumer to agree to the settlement before fees can be charged, and client consent is an ethical baseline.

An upset client calls about frequent collection calls. What is the most effective de-escalation approach?

Answer: Listen actively, acknowledge their frustration, explain their FDCPA rights, and outline the next steps

Empathy plus accurate information about rights and next steps de-escalates tension without making false promises.