Collection Strategies & Methods Flashcards

Which metric best measures the effectiveness of a collector's negotiation skill specifically, independent of portfolio quality?

Answer: Promise-kept rate (PKR) on arranged payment plans

Promise-kept rate isolates the collector's ability to establish reliable commitments, since broken promises often reflect poor negotiation regardless of portfolio mix.

Under the FDCPA, if a consumer's attorney notifies the collector that they represent the consumer, subsequent contacts must be directed to:

Answer: The attorney, unless the attorney consents to direct consumer contact

FDCPA §805(a)(2) requires all communications to cease with the consumer and redirect to their attorney once representation is established.

A collector using a predictive dialer must comply with which regulation to avoid calling numbers assigned to cell phones without prior express consent?

Answer: Telephone Consumer Protection Act (TCPA)

The TCPA restricts autodialed or prerecorded calls to cell phones without prior express written consent, a critical compliance requirement for predictive dialing systems.

Which collection strategy is most appropriate for a large portfolio of small-balance accounts where live agent calls are not cost-effective?

Answer: Automated self-service outreach via IVR, email, and SMS campaigns

Automated multichannel outreach delivers cost-efficient contact attempts at scale for low-balance accounts where agent labor cost would exceed expected recovery.

When a collector offers a lump-sum settlement, which closing technique involves presenting two acceptable payment options rather than asking if the debtor wants to settle?

Answer: Alternative close

The alternative close asks 'Would you prefer to settle for $X today or $Y by Friday?' — both options accept settlement, steering the debtor toward a decision rather than a yes/no.

Which legal remedy allows a creditor or debt buyer to legally compel an employer to withhold a portion of a debtor's paycheck after obtaining a court judgment?

Answer: Wage garnishment

Wage garnishment is a post-judgment enforcement tool that directs the employer to withhold a federally capped portion of disposable earnings and remit it to satisfy the debt.

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

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.