Industry Regulations & Compliance Flashcards

The FTC's Red Flags Rule requires asset recovery companies acting as creditors to implement a written program to detect and respond to:

Answer: Identity theft warning signs

The Red Flags Rule requires covered entities to develop a written Identity Theft Prevention Program to identify, detect, and respond to identity theft red flags.

When skip tracing a debtor, using information obtained from social media profiles for location purposes is generally permissible if:

Answer: The information is publicly posted by the debtor

Publicly available social media information may be used for skip tracing; however, creating fake profiles or pretexting violates the FDCPA and FTC Act.

A recovery agent who knowingly uses false pretenses to obtain location information about a debtor violates which FDCPA provision?

Answer: Prohibition on false or misleading representations

Section 807 of the FDCPA prohibits debt collectors from using false, deceptive, or misleading representations in connection with debt collection.

A lienholder assigns a repossession to an agent. If the agent commits a breach of the peace, liability may extend to the lienholder under the legal doctrine of:

Answer: Respondeat superior or vicarious liability

Creditors can be held vicariously liable for a repossession agent's breach of the peace under respondeat superior or agency law principles.

The Driver's Privacy Protection Act (DPPA) restricts asset recovery professionals from accessing state DMV records for which purpose?

Answer: Locating a debtor's address for personal solicitation unrelated to debt

The DPPA limits DMV record access to permissible purposes and prohibits using the information for personal solicitation or purposes unrelated to lawful debt collection.

In most U.S. states, a repossession agent who takes possession of a vehicle must report the repossession to local law enforcement within:

Answer: 24 to 72 hours, as required by state statute

Most states require repossession agents to notify local law enforcement within 24 to 72 hours of taking a vehicle to prevent mistaken stolen vehicle reports.

Which of the following actions by a recovery company would constitute a violation of the FTC Act's prohibition on unfair or deceptive practices?

Answer: Falsely claiming to be a law enforcement officer to gain access to a vehicle

Falsely impersonating a law enforcement officer is both an unfair and deceptive practice under the FTC Act and may also be a criminal offense.