CARS Asset Recovery Specialist Asset Investigation & Identification 2 — Questions and Answers
Question 1: When conducting a skip trace to locate a debtor's new address, which database is MOST commonly used as a starting point?
- The National Crime Information Center (NCIC)
- Credit bureau header information (Correct answer)
- The Federal Reserve financial database
- IRS tax return records
Correct answer: Credit bureau header information
Credit bureau header information (name, address, employment) is a primary skip-trace resource because it is updated whenever a consumer applies for credit.
Question 2: A vehicle is registered to an LLC rather than an individual debtor. What is the investigator's BEST next step?
- Abandon the lead since the vehicle cannot be repossessed from a business
- Subpoena the LLC's bank records immediately
- Research the LLC's registered agent and member/officer filings to link the debtor (Correct answer)
- Report the debtor to the state attorney general
Correct answer: Research the LLC's registered agent and member/officer filings to link the debtor
Researching LLC formation documents through the Secretary of State identifies members and officers, often revealing the debtor as the beneficial owner of the vehicle.
Question 3: Which of the following best describes 'asset hiding' in the context of collateral investigation?
- A debtor selling collateral below market value to a third party to obstruct recovery (Correct answer)
- A lender marking an asset as charged-off prematurely
- A repossession agent failing to report a vehicle's location
- A debtor filing bankruptcy without disclosing the asset
Correct answer: A debtor selling collateral below market value to a third party to obstruct recovery
Asset hiding typically involves transferring collateral to a third party at below-market value specifically to frustrate a secured creditor's recovery efforts.
Question 4: Under the Fair Debt Collection Practices Act (FDCPA), which action is PROHIBITED when attempting to locate a debtor?
- Contacting the debtor's employer once to verify employment
- Telling a third party the purpose of the call is debt collection (Correct answer)
- Requesting the debtor's last-known address from a neighbor
- Leaving a message with a family member asking the debtor to call back
Correct answer: Telling a third party the purpose of the call is debt collection
The FDCPA prohibits disclosing to third parties that the contact is related to debt collection when obtaining location information.
Question 5: An asset investigation reveals that a debtor recently transferred a titled vehicle to a spouse for $1. What legal doctrine may allow a creditor to challenge this transfer?
- Collateral estoppel
- Fraudulent conveyance (voidable transfer) (Correct answer)
- Res judicata
- Statute of frauds
Correct answer: Fraudulent conveyance (voidable transfer)
A transfer made for inadequate consideration to an insider while a debtor is insolvent can be unwound as a fraudulent or voidable conveyance under state and federal law.
Question 6: Which government agency maintains the National Motor Vehicle Title Information System (NMVTIS)?
- The Federal Trade Commission (FTC)
- The National Highway Traffic Safety Administration (NHTSA)
- The Department of Justice (DOJ) (Correct answer)
- The Consumer Financial Protection Bureau (CFPB)
Correct answer: The Department of Justice (DOJ)
The DOJ administers NMVTIS, which aggregates title, brand, and odometer data from all 50 states to help identify vehicles and detect title washing.
Question 7: A debtor's vehicle was repossessed but the agent suspects the odometer was rolled back. Which record should be consulted first to verify?
- The debtor's credit report
- NMVTIS odometer history and state title records (Correct answer)
- The lender's original loan application
- The vehicle's GPS telematics log
Correct answer: NMVTIS odometer history and state title records
NMVTIS and state title records capture odometer readings at each title transfer, making them the primary tool for detecting rollback discrepancies.
CARS Asset Recovery Specialist Asset Investigation & Identification 2
When conducting a skip trace to locate a debtor's new address, which database is MOST commonly used as a starting point?