Asset Recovery Specialist Legal Compliance Flashcards

Under the FDCPA, which type of debt is NOT covered by its consumer protection provisions?

Answer: Business debts incurred by a sole proprietorship for commercial purposes

The FDCPA covers only consumer debts incurred for personal, family, or household purposes; business debts are excluded from its protections.

Which federal law requires asset recovery companies to implement a written information security program to protect sensitive consumer data?

Answer: GLBA Safeguards Rule

The GLBA Safeguards Rule requires financial institutions, including those involved in asset recovery, to develop and maintain a written information security program.

A repossession occurs in a state that requires lenders to obtain a court order (replevin) before repossessing collateral. Proceeding without that order would:

Answer: Constitute an unlawful repossession subject to civil and possibly criminal liability

Repossessing without a required court replevin order violates state law and can expose the lender and agent to civil damages and criminal penalties.

Under the Telephone Consumer Protection Act (TCPA), contacting a debtor's cell phone using an automatic dialing system without prior express consent may result in statutory damages of:

Answer: $500 to $1,500 per violation

The TCPA provides for statutory damages of $500 per violation, trebled to $1,500 for willful violations, for unauthorized autodialed calls to cell phones.

Which of the following describes 'wrongful repossession' and its most common legal consequence for the creditor?

Answer: Repossessing collateral without legal right or through breach of peace; creditor may lose the right to collect a deficiency

A wrongful repossession—lacking legal right or involving a breach of peace—can cause the creditor to forfeit its right to pursue the debtor for a deficiency balance.

When conducting skip tracing, which practice would violate the FCRA's permissible purpose requirements?

Answer: Accessing a consumer's credit file to locate them for a personal curiosity unrelated to debt collection

Accessing a consumer's credit report for personal curiosity or any purpose not listed as permissible under the FCRA is a direct violation of the statute.

A repossession company stores repossessed vehicles at a storage lot. Which legal requirement most directly governs how long a debtor must be given to retrieve personal property left in the vehicle?

Answer: State law, which varies and typically specifies a notice period and minimum retrieval window

Personal property retrieval requirements after repossession are governed by state law, which varies in terms of required notice and timeframe.