PCS PCS Debt Validation & Dispute Handling 2 — Questions and Answers
Question 1: Under the FCRA, a data furnisher must investigate a consumer dispute within how many days?
- 15 days
- 30 days (extendable to 45 days with additional consumer info) (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days (extendable to 45 days with additional consumer info)
The FCRA generally requires furnishers to complete their dispute investigation within 30 days, extendable to 45 days if the consumer provides additional information.
Question 2: A collector receives a credit bureau dispute forwarded by the CRA. Which system must the collector use to respond?
- Fax only
- E-OSCAR (Online Solution for Complete and Accurate Reporting) (Correct answer)
- Verbal phone response to the CRA
- The collector's own internal ticketing system
Correct answer: E-OSCAR (Online Solution for Complete and Accurate Reporting)
E-OSCAR is the industry-standard electronic system used by furnishers and CRAs to exchange dispute information and transmit Automated Credit Dispute Verification (ACDV) forms.
Question 3: If a collector determines a disputed debt is valid after investigation, they should:
- Mark the account 'disputed' permanently with no further action
- Notify the consumer and the CRA of the results and update the tradeline if necessary (Correct answer)
- Re-add the item to the credit report without any notation
- Sell the account to a third-party collector immediately
Correct answer: Notify the consumer and the CRA of the results and update the tradeline if necessary
After investigation, the furnisher must notify the consumer of the results and update or correct any inaccurate information with the CRAs.
Question 4: What is a 'stale' debt, and why is it significant in dispute handling?
- A debt older than 1 year that requires higher interest
- A debt beyond the statute of limitations, which may still be collectible but cannot be sued upon (Correct answer)
- A debt that has been fully paid and must be deleted immediately
- A debt transferred more than twice, which voids the obligation
Correct answer: A debt beyond the statute of limitations, which may still be collectible but cannot be sued upon
A stale or time-barred debt has exceeded the statute of limitations, meaning collectors cannot sue to enforce it, though they may still attempt to collect voluntarily.
Question 5: When a consumer claims 'identity theft' as the reason for disputing a debt, the collector must:
- Accept the claim without any documentation
- Request an FTC Identity Theft Report or police report and review the account for fraud indicators (Correct answer)
- Immediately delete the account from all systems
- Transfer the debt to the original creditor without investigation
Correct answer: Request an FTC Identity Theft Report or police report and review the account for fraud indicators
Collectors should request documentation such as an FTC Identity Theft Report and review the account for signs of fraud before ceasing collection or deleting records.
Question 6: Which action constitutes 're-aging' a debt, which is prohibited under the FCRA?
- Updating a tradeline with a new delinquency date to extend the 7-year reporting period (Correct answer)
- Correcting the original delinquency date after a data error
- Adding a dispute notation to a tradeline
- Removing a paid collection account voluntarily
Correct answer: Updating a tradeline with a new delinquency date to extend the 7-year reporting period
Re-aging occurs when a collector illegally resets the delinquency date to a more recent date, fraudulently extending the 7-year period a collection can appear on a credit report.
PCS PCS Debt Validation & Dispute Handling 2
Under the FCRA, a data furnisher must investigate a consumer dispute within how many days?