CPC Privacy Protection & Ethical Practices 2 — Questions and Answers
Question 1: Under the FDCPA, which of the following constitutes a prohibited third-party disclosure?
- Leaving a voicemail that mentions the debt to a shared household phone (Correct answer)
- Contacting an employer solely to verify employment status
- Sending a letter to the debtor's last known address
- Calling the debtor's cell phone during permitted hours
Correct answer: Leaving a voicemail that mentions the debt to a shared household phone
Leaving a voicemail mentioning the debt on a shared line risks disclosure to unauthorized third parties, violating FDCPA privacy protections.
Question 2: A collector learns that a debtor has filed for bankruptcy. What is the ethical and legal obligation?
- Continue collection efforts until official notice is received in writing
- Immediately cease all collection activity and refer the account to legal counsel (Correct answer)
- Reduce contact to once per week until the bankruptcy is confirmed
- Notify the credit bureau and continue normal collection procedures
Correct answer: Immediately cease all collection activity and refer the account to legal counsel
Upon learning of a bankruptcy filing, collectors must immediately stop collection activity due to the automatic stay provision of bankruptcy law.
Question 3: Which practice best aligns with ethical data minimization principles in debt collection?
- Collecting all available personal data on a debtor for future use
- Sharing debtor information across all affiliated company departments
- Retaining only the information necessary to collect the specific debt (Correct answer)
- Storing debtor data indefinitely to support potential future accounts
Correct answer: Retaining only the information necessary to collect the specific debt
Ethical data minimization requires collecting and retaining only information that is necessary and relevant to the specific collection purpose.
Question 4: A debtor requests validation of a debt in writing within 5 days of initial contact. The collector must:
- Cease all collection activity until validation is provided (Correct answer)
- Provide validation within 30 days only if the debtor pays a processing fee
- Continue collection calls while preparing validation documents
- Report the account as disputed to the credit bureau after 60 days
Correct answer: Cease all collection activity until validation is provided
Under the FDCPA, collectors must cease collection activity upon receipt of a written validation request until verification is mailed to the debtor.
Question 5: Which scenario best represents an ethical skip-tracing practice?
- Purchasing debtor data from a social media platform without consent
- Using a pretextual scenario to get a neighbor to confirm the debtor's address
- Accessing public records and credit header data through permissible channels (Correct answer)
- Impersonating a government agent to obtain address information
Correct answer: Accessing public records and credit header data through permissible channels
Ethical skip tracing relies on permissible-purpose data sources such as public records and credit headers, not deception or unauthorized access.
Question 6: What is the primary purpose of a cease-communication letter under the FDCPA?
- To dispute the validity of the debt amount
- To direct the collector to stop all further contact with the consumer (Correct answer)
- To request an extended payment plan from the collector
- To alert the credit bureau of an error on the consumer's report
Correct answer: To direct the collector to stop all further contact with the consumer
A cease-communication letter requires the collector to stop all contact except to notify the consumer of specific legal actions being taken.
Question 7: When a collector discovers that a debtor's personal data was accessed by an unauthorized employee, the ethical response is to:
- Document the incident internally and monitor for further breaches
- Delete all records of the incident to protect the company
- Notify affected individuals and appropriate authorities per breach protocols (Correct answer)
- Suspend the employee and continue operations without reporting
Correct answer: Notify affected individuals and appropriate authorities per breach protocols
Ethical and legal data breach protocols require timely notification to affected consumers and relevant authorities to mitigate harm.
CPC Privacy Protection & Ethical Practices 2
Under the FDCPA, which of the following constitutes a prohibited third-party disclosure?