PCM Ethics & Professional Standards 2

Question 1

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

Accepted Answer

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

Answer

Determine whether the consumer is attempting to avoid a legitimate debt before complying

Answer

Escalate collection efforts one final time before stopping all communication

Answer

Transfer the account to a third-party collector who can continue contact

Question 2

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

Accepted Answer

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

Answer

Share it with other clients to identify cross-selling or referral opportunities

Answer

Store it indefinitely to support any future collection efforts on related accounts

Answer

Provide it to any party requesting assistance with related debt recovery

Question 3

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

Accepted Answer

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

Answer

The consumer signs any document the collector presents agreeing to pay the amount stated

Answer

The collection manager approves the payment arrangement on the creditor client's behalf

Answer

The debtor is informed of consequences only after they miss their first scheduled payment

Question 4

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

Accepted Answer

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

Answer

Documenting all consumer contacts accurately in the collection system

Answer

Verifying debt information before initiating any contact with a consumer

Answer

Offering multiple payment options to accommodate the consumer's financial situation

Question 5

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

Accepted Answer

Pause collection activity and conduct a thorough investigation of the claim

Answer

Continue collection efforts until the consumer provides documented proof of the identity theft claim

Answer

Intensify collection efforts to maximize recovery before the account is formally disputed

Answer

Transfer the account to a specialized unit without conducting any preliminary investigation

Question 6

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

Accepted Answer

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

Answer

It requires pursuing every collectible debt through litigation regardless of cost

Answer

It requires maximizing recovery for creditor clients above all other considerations

Answer

It means ensuring collectors receive fair compensation relative to their performance

Question 7

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?

Accepted Answer

Disclose the offer to senior management and decline the incentive

Answer

Accept the incentive if the vendor's services are genuinely competitive in the market

Answer

Accept the incentive but donate the full amount to a charitable organization

Answer

Negotiate a better incentive before making any business decision