PCS PCS Professional Ethics & Compliance 2 — Questions and Answers
Question 1: Which practice is an example of an unfair collection practice prohibited by the FDCPA?
- Sending a written demand letter
- Depositing a post-dated check before its date without prior notice (Correct answer)
- Calling between 8 AM and 9 PM local time
- Offering a payment plan to the consumer
Correct answer: Depositing a post-dated check before its date without prior notice
The FDCPA prohibits depositing or threatening to deposit a post-dated check before its date or without prior notice, as this is considered an unfair practice.
Question 2: A collector is asked by a supervisor to add unauthorized fees to a consumer's balance. The ethical response is to:
- Add the fees since management directed it
- Refuse, as adding unauthorized fees violates the FDCPA and professional ethics (Correct answer)
- Add fees only if the consumer is unlikely to notice
- Ask the consumer's permission before adding fees
Correct answer: Refuse, as adding unauthorized fees violates the FDCPA and professional ethics
The FDCPA prohibits collecting amounts not authorized by the agreement or permitted by law; following a supervisor's unethical directive does not shield the collector from liability.
Question 3: What does a compliance management system (CMS) in a collection agency typically include?
- Only a written policy manual
- Board oversight, written policies, training, monitoring, and a consumer complaint response process (Correct answer)
- Monthly calls with the CFPB
- Automated dialers configured to follow call time rules
Correct answer: Board oversight, written policies, training, monitoring, and a consumer complaint response process
The CFPB expects a robust CMS to include board/management oversight, written policies, employee training, ongoing monitoring, and a formal process for handling consumer complaints.
Question 4: Which regulation governs how personally identifiable information (PII) collected during debt collection must be protected?
- FDCPA Section 804
- Gramm-Leach-Bliley Act (GLBA) Safeguards Rule (Correct answer)
- FCRA Section 623
- ECOA Regulation B
Correct answer: Gramm-Leach-Bliley Act (GLBA) Safeguards Rule
The GLBA Safeguards Rule requires financial institutions, including debt collectors, to implement security programs to protect the nonpublic personal information they collect.
Question 5: When a collection agency employee suspects their colleague is accessing consumer data without a legitimate business purpose, this represents a potential violation of:
- FDCPA Section 807
- GLBA privacy requirements and possibly the Computer Fraud and Abuse Act (CFAA) (Correct answer)
- FCRA Section 609
- Regulation F call frequency rules
Correct answer: GLBA privacy requirements and possibly the Computer Fraud and Abuse Act (CFAA)
Unauthorized access to consumer data violates GLBA privacy protections and may also constitute a federal crime under the CFAA, which prohibits unauthorized computer access.
Question 6: Under the FDCPA, which party bears primary responsibility for ensuring collectors comply with the law?
- The original creditor only
- The CFPB directly
- The debt collection agency and its employees individually (Correct answer)
- The consumer's state attorney general
Correct answer: The debt collection agency and its employees individually
Both the agency and the individual collectors can be held personally liable for FDCPA violations, making compliance a shared responsibility across the organization.
PCS PCS Professional Ethics & Compliance 2
Which practice is an example of an unfair collection practice prohibited by the FDCPA?