CPC Privacy Protection & Ethical Practices 3 — Questions and Answers
Question 1: Under the Gramm-Leach-Bliley Act (GLBA), debt collectors who are financial institutions must:
- Provide consumers with an annual privacy notice describing information sharing practices (Correct answer)
- Obtain written consent before making any collection calls
- Report all debtor information to the Federal Reserve annually
- Destroy all consumer data after the debt is paid in full
Correct answer: Provide consumers with an annual privacy notice describing information sharing practices
GLBA requires covered financial institutions to provide annual privacy notices explaining how consumer information is collected and shared.
Question 2: A debtor asks a collector what information the agency has about them. Ethically, the collector should:
- Decline to share any information citing proprietary business processes
- Provide only the account balance and ignore other personal data questions
- Inform the debtor of what information is held and how it is used, per applicable law (Correct answer)
- Transfer the call immediately to a supervisor without answering
Correct answer: Inform the debtor of what information is held and how it is used, per applicable law
Ethical practice and laws like the FDCPA require transparency with consumers about the information held and its purpose.
Question 3: Which ethical principle requires collectors to treat all debtors with dignity regardless of the debt amount?
- Proportionality
- Confidentiality
- Respect and non-discrimination (Correct answer)
- Data sovereignty
Correct answer: Respect and non-discrimination
Professional collectors must treat every consumer with respect and without discrimination, regardless of the debt size or consumer background.
Question 4: A collector receives a written request from a consumer stating they cannot be contacted at work. The collector must:
- Contact the employer only through written correspondence instead
- Stop contacting the consumer at their workplace immediately (Correct answer)
- Continue workplace contact for 30 days before honoring the request
- Verify the request is valid with the creditor before complying
Correct answer: Stop contacting the consumer at their workplace immediately
The FDCPA requires collectors to honor consumer requests to stop workplace contact immediately upon notification.
Question 5: Which of the following represents a FCRA (Fair Credit Reporting Act) violation by a debt collector?
- Reporting an account as disputed after receiving a consumer dispute
- Updating a collection account after receiving payment
- Reporting a paid debt as still outstanding to a credit bureau (Correct answer)
- Notifying a credit bureau of a new collection account
Correct answer: Reporting a paid debt as still outstanding to a credit bureau
Reporting a paid debt as still outstanding is a form of furnishing inaccurate information, which violates the FCRA's accuracy requirements.
Question 6: In the context of the CPC ethical standards, 'informed consent' in data handling means:
- The collector informs the debtor after data has already been shared
- The debtor understands and agrees to how their information will be used before collection begins (Correct answer)
- The creditor consents on behalf of the debtor to share all information
- Consent is implied once a debt is placed for collection
Correct answer: The debtor understands and agrees to how their information will be used before collection begins
Informed consent requires that consumers understand and agree to data use practices before their information is collected or shared.
Question 7: A collector is asked by a friend who works at a law firm to share a mutual acquaintance's debt information. The ethical action is to:
- Share the information since it will stay within legal channels
- Refuse, as sharing consumer data without permissible purpose is a privacy violation (Correct answer)
- Share only the balance owed, not the full account details
- Check with a supervisor and share if approved informally
Correct answer: Refuse, as sharing consumer data without permissible purpose is a privacy violation
Sharing consumer data without a legally permissible purpose violates privacy laws and professional ethics, regardless of the recipient's profession.
CPC Privacy Protection & Ethical Practices 3
Under the Gramm-Leach-Bliley Act (GLBA), debt collectors who are financial institutions must: