CCM Collections & Recovery 2

Question 1

Under the Fair Debt Collection Practices Act (FDCPA), which communication time restriction applies to third-party collectors?

Accepted Answer

Calls prohibited before 8 a.m. or after 9 p.m. local time of the debtor

Answer

The FDCPA prohibits third-party debt collectors from calling consumers before 8 a.m. or after 9 p.m. local time of the debtor.

Question 2

A debtor sends a written cease-communication request to a third-party collector. What is the collector's required response?

Accepted Answer

Cease all further contact except to confirm no further action or to notify of specific legal action

Answer

Upon receiving a written cease-communication request, the FDCPA requires the collector to stop contacting the debtor except to confirm cessation or to advise of specific remedies.

Question 3

Which metric best measures the effectiveness of a collections department over a rolling period?

Accepted Answer

Days Sales Outstanding (DSO)

Answer

DSO measures the average number of days receivables remain outstanding, directly reflecting collection efficiency.

Question 4

A debtor disputes a debt in writing within 30 days of initial notice. Under the FDCPA, what must the collector do?

Accepted Answer

Cease collection activity and provide verification of the debt before continuing

Answer

The collector must stop collection efforts and mail verification of the debt before resuming any collection activity.

Question 5

In a Chapter 7 bankruptcy proceeding, what is the effect of the automatic stay on a creditor's collection efforts?

Accepted Answer

All collection actions, including lawsuits and calls, must immediately stop

Answer

The automatic stay halts virtually all collection actions against the debtor immediately upon the bankruptcy filing.

(CCM) Certified Credit Manager Practice Test

(CCM) Certified Credit Manager Practice Test

CCM Collections & Recovery 2