Professional Collection Specialist (PCS) — Questions and Answers

Question 1: Under the Fair Debt Collection Practices Act, within how many days must a debt collector send written validation notice after initial communication?

60 days
30 days
90 days
5 days (Correct answer)

Correct answer: 5 days

Under FDCPA Section 809(a), debt collectors must send written validation notice within 5 days of the initial communication if it was not included in the initial communication itself.

Question 2: Under the FDCPA, what is the statute of limitations for a private lawsuit brought by a consumer against a debt collector?

6 months from the violation
3 years from discovery of the violation
2 years from the date the violation occurred
1 year from the date the violation occurred (Correct answer)

Correct answer: 1 year from the date the violation occurred

Consumers must file a private FDCPA lawsuit within one year of the date on which the violation occurred.

Question 3: A collector discovers a debtor's new address through skip tracing. Under the FDCPA, communications sent to that address must:

Include a return address that reveals the collection agency's name
Be sent without any external marking identifying it as debt-related (Correct answer)
Include the collector's physical address on the envelope
Be preceded by a phone call to confirm receipt

Correct answer: Be sent without any external marking identifying it as debt-related

FDCPA §805(c) prohibits using envelopes or postcards that reveal the communication is from a debt collector or is about a debt.

Question 4: A debtor claims to have already paid the account in full. What should the collector do first?

Request proof of payment and place the account on hold pending review (Correct answer)
Demand payment again because the system shows a balance
Cease all collection activity immediately
Transfer the account to legal without investigation

Correct answer: Request proof of payment and place the account on hold pending review

The collector must investigate the claim by requesting documentation before continuing collection efforts to avoid FDCPA violations.

Question 5: What must a furnisher do if it cannot locate any record of an account a consumer is disputing?

Refer the consumer to the original creditor
Delete the tradeline and notify the CRA that it cannot be verified (Correct answer)
Report the account as fraud
Provide the CRA with a statement that the account was not found

Correct answer: Delete the tradeline and notify the CRA that it cannot be verified

If a furnisher cannot locate or verify a disputed account, it must delete the tradeline and inform the CRA, as unverifiable information cannot be lawfully reported.

Question 6: Which of the following best describes a 'replevin' action in debt collection?

A motion to vacate a default judgment
A legal action to recover specific personal property (collateral) from a debtor who has defaulted (Correct answer)
A lawsuit to recover money owed on an unsecured credit card
A wage garnishment proceeding in small claims court

Correct answer: A legal action to recover specific personal property (collateral) from a debtor who has defaulted

Replevin is a legal action used by secured creditors to recover specific personal property (collateral) that a debtor possesses after defaulting on a secured loan.

Question 7: Which negotiation technique involves a collector starting with a high demand to leave room for concessions toward the actual target settlement?

Anchoring (Correct answer)
Good cop/bad cop
Bracketing
Mirroring

Correct answer: Anchoring

Anchoring sets the initial reference point high so that any concession still moves the debtor toward the collector's actual goal.

Question 8: A bank levy in debt collection allows a judgment creditor to:

Place a lien on the debtor's home
Garnish the debtor's wages
Intercept the debtor's tax refund
Seize funds directly from the debtor's bank account (Correct answer)

Correct answer: Seize funds directly from the debtor's bank account

A bank levy (also called a bank attachment) allows a judgment creditor to have funds frozen and seized directly from the debtor's bank accounts to satisfy the judgment.

Question 9: What term describes the practice of a debt collector re-aging an account to make it appear more recent than it actually is?

Re-aging (Correct answer)
Status resetting
Balance updating
Account refreshing

Correct answer: Re-aging

Re-aging is the illegal practice of changing the date of first delinquency to extend the reporting period beyond the legally permitted 7 years.

Question 10: If a debtor sends a written request for debt validation, what must the account file reflect during the validation period?

All collection activity must be suspended until validation is provided (Correct answer)
The collector may contact third parties to locate the debtor
Collection activity may continue normally
The account should be returned to the client immediately

Correct answer: All collection activity must be suspended until validation is provided

Under FDCPA Section 809(b), upon receiving a written validation request, the collector must cease collection activity until debt validation is mailed to the debtor.

Question 11: How long are civil judgments typically valid before they may need to be renewed to remain enforceable?

20 years regardless of state
1 year
5 to 10 years, depending on state law (Correct answer)
3 years

Correct answer: 5 to 10 years, depending on state law

Judgment validity periods vary by state, commonly ranging from 5 to 10 years, after which the creditor may need to renew the judgment to continue enforcement efforts.

Question 12: Which of the following represents an ILLEGAL skip tracing tactic under the FDCPA?

Searching publicly available court records for a debtor's new address
Falsely identifying yourself as a government official to obtain debtor location information from a third party (Correct answer)
Calling a neighbor once to ask if they have the debtor's current address
Using a commercial skip tracing database to find a new phone number

Correct answer: Falsely identifying yourself as a government official to obtain debtor location information from a third party

Misrepresenting identity (e.g., claiming to be a government official) violates FDCPA Section 807, which prohibits false or misleading representations.

Question 13: An account is placed with a collection agency after the original creditor charged it off. What placement documentation should be in the file?

The debtor's credit score at origination
Only the debtor's Social Security number
Placement letter, account number, balance at charge-off, and creditor contact (Correct answer)
The original creditor's internal audit report

Correct answer: Placement letter, account number, balance at charge-off, and creditor contact

The placement package must include the placement letter, account identifiers, balance at charge-off, and creditor contact information to establish the agency's authority and the debt's legitimacy.

Question 14: Electronic account files in collection agencies must meet which standard to be considered legally admissible?

They must be backed up only on local servers
They must be printed and notarized monthly
They must be accurate, complete, and stored with audit trail capabilities (Correct answer)
They must be accessible only to supervisors

Correct answer: They must be accurate, complete, and stored with audit trail capabilities

Electronic records must be accurate, complete, tamper-evident, and maintain a full audit trail to be admissible and compliant with federal and state recordkeeping requirements.

Question 15: What is the first step in creating an effective collection strategy?

Offering a settlement to close the case quickly
Sending a collection notice without further assessment
Contacting the debtor immediately without a plan
Evaluating the debtor's financial situation (Correct answer)

Correct answer: Evaluating the debtor's financial situation

Before initiating any collection efforts, it is essential to understand the debtor's current financial situation. This initial evaluation helps determine their ability to pay and informs the most appropriate and realistic collection strategy. Without this assessment, collection efforts might be misdirected or ineffective.

Question 16: In the context of collection, 'right-party contact' (RPC) most directly impacts which performance metric?

Account placement volume
Promises-to-pay rate and dollars collected (Correct answer)
Regulatory complaint rate
Average days delinquent

Correct answer: Promises-to-pay rate and dollars collected

Right-party contact is the gateway to all productive collection activity — without reaching the debtor, no promises-to-pay or payments can be obtained.

Question 17: A New York debt collector collects debts from consumers in California. Which state's laws apply?

Both states' laws may apply depending on the specific requirements (Correct answer)
Only California law, because that is where the consumer resides
Neither state's law applies; only the FDCPA governs interstate collection
Only New York law, because that is where the collector is located

Correct answer: Both states' laws may apply depending on the specific requirements

A collector may need to comply with multiple states' laws — the state where it is licensed or located, and the state where the consumer resides — when both have applicable debt collection statutes.

Question 18: A collector discovers that the statute of limitations on a debt has expired. Under most state laws and CFPB guidance, the collector should NOT:

Offer a voluntary settlement
Sue or threaten to sue the debtor to collect the time-barred debt (Correct answer)
Accept a voluntary payment if the debtor offers one
Inform the debtor the debt still exists

Correct answer: Sue or threaten to sue the debtor to collect the time-barred debt

Suing or threatening suit on a time-barred debt is considered an unfair and deceptive practice under CFPB guidance and has been held to violate the FDCPA.

Question 19: How does the Consumer Financial Protection Bureau (CFPB) protect consumers?

It limits the power of financial institutions to serve customers
It ensures businesses are not accountable for customer complaints
It focuses solely on corporate interests
It protects consumers from harmful financial products and ensures fair treatment (Correct answer)

Correct answer: It protects consumers from harmful financial products and ensures fair treatment

The Consumer Financial Protection Bureau (CFPB) protects consumers by regulating financial products and services, such as mortgages, credit cards, and student loans. Its mission is to ensure that consumers are treated fairly by financial institutions and have access to clear, accurate information. The CFPB investigates complaints, enforces laws, and educates the public to prevent harmful practices.

Question 20: Which FCRA provision specifically obligates collection agencies to provide complete and accurate information to CRAs on an ongoing basis?

Section 623 – Responsibilities of furnishers (Correct answer)
Section 611 – Consumer dispute procedures
Section 605 – Obsolescence of information
Section 609 – Disclosures to consumers

Correct answer: Section 623 – Responsibilities of furnishers

Section 623 of the FCRA outlines the duties of information furnishers, including the obligation to report accurate, complete, and timely information to CRAs.

Question 21: A debtor requests that all future communications be in writing. Under the FDCPA, the collector must:

Ignore the request and continue calling
Report the debtor to the original creditor
Cease all telephone contact and communicate only in writing (Correct answer)
Close the account immediately

Correct answer: Cease all telephone contact and communicate only in writing

When a debtor requests written communication only, the FDCPA requires collectors to honor that preference and stop phone contact.

Question 22: Under the Consumer Credit Protection Act (CCPA), the maximum amount of disposable earnings that may be garnished per week is generally:

25% of disposable earnings or the amount by which earnings exceed 30 times the federal minimum wage, whichever is less (Correct answer)
10% of disposable earnings
The entire paycheck if the debt is over $5,000
50% of disposable earnings

Correct answer: 25% of disposable earnings or the amount by which earnings exceed 30 times the federal minimum wage, whichever is less

The CCPA limits garnishment to the lesser of 25% of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage.

Question 23: In most states, a debtor's primary residence (homestead) may be protected from forced sale to satisfy a judgment by:

State homestead exemption laws (Correct answer)
The Servicemembers Civil Relief Act
The FDCPA venue provision
The Fair Housing Act

Correct answer: State homestead exemption laws

State homestead exemption laws protect a debtor's primary residence (up to a certain value, which varies by state) from being seized or sold to satisfy a judgment.

Question 24: An abstract of judgment is a document that:

Orders a bank to freeze the debtor's accounts
Notifies credit bureaus of a court verdict
Creates a lien on real property in the county where it is recorded (Correct answer)
Summarizes the debtor's credit history

Correct answer: Creates a lien on real property in the county where it is recorded

An abstract of judgment is a condensed record of a court judgment that, when recorded with the county, creates a lien on any real property the debtor owns in that county.

Question 25: What is a key provision under the Fair Credit Reporting Act (FCRA)?

It allows businesses to freely access consumer credit reports
It allows creditors to report negative information indefinitely
It eliminates the need for credit reporting agencies
It provides consumers with the right to dispute errors on their credit reports (Correct answer)

Correct answer: It provides consumers with the right to dispute errors on their credit reports

A key provision under the Fair Credit Reporting Act (FCRA) is the right for consumers to dispute inaccurate or incomplete information on their credit reports. This empowers individuals to challenge errors that could negatively impact their creditworthiness. The FCRA also mandates that credit reporting agencies investigate these disputes and correct any verified inaccuracies.

Question 26: Which federal agency has primary enforcement authority over debt collectors who violate the FDCPA during skip tracing activities?

Office of the Comptroller of the Currency (OCC)
Federal Trade Commission (FTC) for non-bank collectors historically, now primarily CFPB (Correct answer)
Federal Reserve Board (FRB)
Consumer Financial Protection Bureau (CFPB)

Correct answer: Federal Trade Commission (FTC) for non-bank collectors historically, now primarily CFPB

The CFPB now holds primary FDCPA enforcement authority over debt collectors, though the FTC historically led this role before the CFPB's creation.

Question 27: A debtor threatens to file bankruptcy if a settlement isn't offered. The collector should:

Threaten legal action in response
Immediately offer the maximum settlement percentage allowed
Hang up and close the account
Treat this as useful information and assess its credibility while consulting the client (Correct answer)

Correct answer: Treat this as useful information and assess its credibility while consulting the client

A bankruptcy threat is a negotiating signal; the collector should assess its credibility and consult the client before adjusting settlement terms.

Question 28: Which collection software module typically handles electronic payment processing, including ACH and credit card transactions from debtors?

Payment gateway integration (Correct answer)
Compliance scrub engine
Workforce management module
Skip tracing module

Correct answer: Payment gateway integration

Payment gateway integration connects the collection platform to processors like payment card networks and ACH networks to accept and record debtor payments.

Question 29: Which of the following is an example of an 'unfair practice' prohibited under FDCPA §808?

Mailing a demand letter via first-class mail
Offering a 30% settlement
Collecting a fee not authorized by the agreement or permitted by law (Correct answer)
Calling at 9 AM on a weekday

Correct answer: Collecting a fee not authorized by the agreement or permitted by law

FDCPA §808 prohibits collecting any amount — including interest, fees, or charges — not expressly authorized by the debt agreement or permitted by law.

Question 30: When documenting a cease communication request from a debtor, which detail is most critical to record?

The collector's personal opinion of the request
The debtor's employer name
The exact date and method the request was received (Correct answer)
The account's current interest rate

Correct answer: The exact date and method the request was received

The exact date and method of the cease communication request must be documented to prove compliance with FDCPA Section 805(c) and protect the agency from liability.

Professional Collection Specialist (PCS)

The PCS certification, offered by ACA International, validates expertise in debt collection practices including FDCPA compliance, collection strategies, account management, legal remedies, and payment negotiation for accounts receivable management professionals.

Questions

35 min

Time Limit

85%

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