PCS Professional Ethics & Compliance Flashcards

Which practice is an example of an unfair collection practice prohibited by the FDCPA?

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.

A collector is asked by a supervisor to add unauthorized fees to a consumer's balance. The ethical response is to:

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.

What does a compliance management system (CMS) in a collection agency typically include?

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.

Which regulation governs how personally identifiable information (PII) collected during debt collection must be protected?

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.

When a collection agency employee suspects their colleague is accessing consumer data without a legitimate business purpose, this represents a potential violation of:

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.

Under the FDCPA, which party bears primary responsibility for ensuring collectors comply with the law?

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.