Mixed Deck — All PCM Topics Flashcards

Before rolling out a new automated payment-reminder workflow to all customers, the best way to validate it is to:

Answer: Run a pilot on a controlled segment and measure results against a control group

A controlled pilot gives measurable evidence and limits risk before a full rollout.

Which dependency type means Task B cannot start until Task A finishes, such as account data cleanup before a portfolio placement?

Answer: Finish-to-start

Finish-to-start is the most common logical relationship, where the successor begins only after the predecessor ends.

Which of the following best defines a conflict of interest in the collections profession?

Answer: When a professional's personal interests could compromise their professional judgment or actions

A conflict of interest occurs when a professional's personal interests or relationships could improperly influence their professional judgment or actions to the detriment of clients or consumers.

What is the MOST important skill for effective operations & process management in Professional Collection Manager Certified?

Answer: Clear communication and the ability to align team efforts with objectives

Clear communication is essential for aligning team efforts, building consensus, and ensuring everyone understands and works toward shared objectives.

What penalties can be imposed for violating debt collection laws?

Answer: Fines and legal damages

Violations of federal debt collection laws, such as the Fair Debt Collection Practices Act (FDCPA), can result in significant penalties for debt collectors. These penalties can include fines imposed by regulatory agencies like the CFPB, as well as legal damages awarded to consumers in civil lawsuits. Consumers can sue for actual damages, statutory damages up to $1,000, and attorney's fees, ensuring accountability for unlawful practices.

Under ECOA and Regulation B, a creditor generally must notify an applicant of adverse action on a completed application within how many days?

Answer: 30 days

Regulation B requires notice of action taken within 30 days after receiving a completed application.

Which data security standard is MOST relevant for a collection agency that processes consumer credit and debit card payments?

Answer: PCI-DSS

The Payment Card Industry Data Security Standard (PCI-DSS) establishes requirements for any entity that processes, stores, or transmits payment card data.

In a SWOT analysis of a collection operation, a pending state law that restricts call frequency would be classified as a:

Answer: Threat

External factors that could harm performance, such as new regulation, are threats.

When a debt collector contacts a third party solely to acquire location information about a consumer, which action is prohibited under the FDCPA?

Answer: Stating that the consumer owes a debt

Under FDCPA §1692b, a collector seeking location information must not state that the consumer owes any debt.

In Professional Collection Manager Certified, how should strategic planning & analysis challenges be prioritized?

Answer: Based on potential impact, urgency, and alignment with strategic objectives

Prioritizing based on impact, urgency, and strategic alignment ensures resources are directed where they will produce the greatest benefit.

An agency wants to market its services to medical providers. Which requirement must it be ready to meet?

Answer: Signing a HIPAA Business Associate Agreement

Agencies that handle protected health information for covered entities must sign a Business Associate Agreement under HIPAA.

Which formula correctly calculates Days Sales Outstanding (DSO)?

Answer: (Accounts receivable / Total credit sales) x Days in period

DSO divides ending receivables by credit sales for the period and multiplies by the number of days.

A roll rate analysis shows 35% of 31–60 day accounts are rolling to 61–90 days, up from 22%. What is the best strategic response?

Answer: Intensify treatment at the 31–60 day stage to stop the flow

Rising roll rates signal that the earlier bucket needs stronger intervention before accounts age further.

Federal law requires employers to verify identity and work eligibility for every new hire. Which form is used?

Answer: USCIS Form I-9

Form I-9 must be completed for every new hire to verify identity and employment authorization in the U.S.

Under SMART goal-setting, which collector goal is best written?

Answer: Increase right-party contacts by 10% on the 90-120 day bucket by March 31

It is specific, measurable, achievable, relevant, and time-bound.

How does a Chapter 13 bankruptcy differ from a Chapter 7 bankruptcy for individuals?

Answer: Chapter 13 involves a repayment plan typically lasting three to five years

Chapter 13 reorganizes debts through a court-approved repayment plan, while Chapter 7 liquidates non-exempt assets.

What federal law regulates debt collection practices in the United States?

Answer: Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) is a federal law specifically designed to protect consumers from abusive, deceptive, and unfair debt collection practices. It sets clear guidelines for what debt collectors can and cannot do when attempting to collect debts. This act ensures that consumers are treated fairly and with respect during the debt collection process.

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.

Under Regulation F, after a collector has a telephone conversation with a consumer about a debt, how long must it generally wait before calling that consumer again about the same debt?

Answer: 7 days

Calling within seven days after a telephone conversation about the debt triggers the harassment presumption under Regulation F.

Which financial metric measures the percentage of total outstanding debt that a collection agency successfully recovers within a given period?

Answer: Recovery rate

Recovery rate measures the percentage of outstanding debt successfully collected and is a primary KPI for collection managers.