Regulatory Compliance & Ethics Flashcards

Before enrollment, which disclosure must a debt relief telemarketer give about timing?

Answer: How long it will take to get results, including when a settlement offer will be made to each creditor

The TSR requires disclosing how long it will take to get results, including when an offer will be made to each creditor.

Which statement must a debt relief provider disclose if the program depends on the consumer not paying creditors?

Answer: Not paying may hurt the consumer's credit, and creditors may still collect or sue

Providers must disclose that not paying creditors can damage credit, lead to collection or lawsuits, and raise balances through fees and interest.

A consumer settles a credit card debt and $8,000 of the balance is forgiven. Which tax consequence should an agent point out, without giving tax advice?

Answer: The creditor may issue a Form 1099-C, and the forgiven amount may be taxable income unless an exclusion such as insolvency applies

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

Under the TSR's Do-Not-Call rules, how often must sellers and telemarketers check their call lists against the National Do Not Call Registry?

Answer: Every 31 days

Telemarketers must scrub their call lists against the National DNC Registry at least every 31 days.

Under the TSR, what are the allowed hours for outbound telemarketing calls, in the consumer's local time?

Answer: 8:00 a.m. to 9:00 p.m.

The TSR bans telemarketing calls before 8 a.m. or after 9 p.m. in the called person's local time.

A prospect asks whether enrolling in debt settlement is better than filing bankruptcy. What is the most ethical answer from a non-attorney agent?

Answer: Explain the general differences and suggest a bankruptcy attorney for legal advice on their situation

Agents may describe the options in general terms but must not practice law, so they should refer legal questions to a licensed attorney.

Which situation is a conflict of interest that an accredited debt relief agent should disclose?

Answer: The agent gets referral payments from the dedicated account provider they recommend

Undisclosed payments from service providers can bias an agent's recommendations and should be disclosed or avoided.