Ethics & Professional Standards Flashcards

What is the primary ethical obligation when a collection agency receives a written cease communication request from a consumer?

Answer: Honor the request immediately, document compliance, and limit further contact to legally permitted purposes

Ethically and legally, a collection agency must immediately honor a cease communication request, document compliance, and restrict further contact to only those purposes permitted by law.

How should a collection manager ethically handle confidential consumer financial information obtained during the collection process?

Answer: Use it only for collection purposes and protect it from unauthorized disclosure

Consumer financial information is confidential and must be used only for legitimate collection purposes, protected from unauthorized access or disclosure under both privacy laws and professional ethics.

What does 'informed consent' require in the context of negotiating payment arrangements with consumers?

Answer: The consumer fully understands and voluntarily agrees to all terms and conditions of a payment plan

Informed consent requires that consumers fully understand all terms, conditions, and implications of any payment arrangement before voluntarily agreeing to it.

Which of the following collector behaviors is a clear violation of professional ethics and the FDCPA?

Answer: Threatening legal action that the agency has no actual intention of pursuing

Threatening legal action that the agency does not intend to pursue is both an ethical violation and a violation of the FDCPA, constituting deceptive misrepresentation.

What is the ethical obligation of a collection manager when an account in their portfolio may involve identity theft?

Answer: Pause collection activity and conduct a thorough investigation of the claim

When identity theft is suspected, the ethical obligation is to pause collection activity and investigate thoroughly to avoid pursuing and harassing an innocent consumer who did not incur the debt.

How does the ethical principle of 'justice' apply specifically to collection management practice?

Answer: It means applying collection procedures consistently and without discrimination across all consumer accounts

The principle of justice in collection management requires that procedures and practices be applied consistently, fairly, and without discrimination across all consumer accounts.

A collection manager is offered a personal financial incentive by a vendor in exchange for directing business to that vendor. What is the ethical course of action?

Answer: Disclose the offer to senior management and decline the incentive

Accepting undisclosed financial incentives from vendors creates a conflict of interest; the ethical course of action is to disclose the offer to management and decline it.