Client Relationship Management Flashcards

A creditor client places accounts on a contingency basis and asks for a 'net remit' arrangement. What does net remit mean?

Answer: The agency deducts its contingency fee before remitting collections to the client

Under net remit, the agency keeps its fee from collected funds and sends the client the balance.

Which metric best shows a client how much of the placed dollar value an agency has collected over the life of a placement?

Answer: Liquidation rate

Liquidation rate measures dollars collected as a percentage of dollars placed.

A client reports that a debtor paid the creditor directly on an account held by the agency. What is the best first step?

Answer: Reconcile the direct payment, update the balance, and apply fee terms per the contract

Direct payments must be reconciled so balances stay accurate and fees follow the contract.

Under CFPB guidance on service providers, why do creditor clients audit their collection agencies?

Answer: Creditors can be held responsible for the conduct of their third-party service providers

CFPB Bulletin 2012-03 (reissued 2016) expects supervised entities to oversee service providers because they share responsibility for consumer harm.

An agency's monthly performance falls below the client's scorecard benchmark. Which response best protects the relationship?

Answer: Proactively share a root-cause analysis and a corrective action plan with deadlines

Being open about the problem and showing a concrete fix builds client trust.

What is the main purpose of a client trust account in a collection agency?

Answer: To keep collected client funds separate from agency operating funds

Trust accounts keep client money separate, as many state licensing laws require.

A client recalls a group of accounts from the agency. What must the agency typically do?

Answer: Stop collection activity and return account data and documents as the contract requires

Once accounts are recalled, the agency must stop activity and return them according to the agreement.