PCS Professional Ethics & Compliance Flashcards

A collection professional encounters a consumer who discloses they are currently hospitalized. Ethically, the collector should:

Answer: Note the circumstance, exercise discretion, and consider deferring aggressive collection activity

Professional ethics require collectors to exercise sensitivity toward vulnerable consumers; aggressive collection during a medical crisis is both unethical and potentially legally actionable.

Which federal agency has primary supervisory authority over large debt collection firms under the Dodd-Frank Act?

Answer: CFPB

The CFPB has supervisory and enforcement authority over larger participant debt collectors, while the FTC retains enforcement authority over smaller collectors.

A collector is offered a cash bonus by a supervisor to collect using high-pressure tactics that may cross legal lines. The ethical obligation is to:

Answer: Decline and report the pressure to the compliance department or external regulators if necessary

Financial incentives do not justify illegal tactics; an ethical professional must refuse and escalate through proper channels, including external regulators if internal channels fail.

Which statement best describes the purpose of a 'model validation notice' provided under Regulation F?

Answer: A safe harbor disclosure template that, when used correctly, satisfies FDCPA validation notice requirements

Regulation F provided a model validation notice that, when used as prescribed, gives debt collectors a safe harbor against claims of inadequate FDCPA disclosures.

What is the primary purpose of maintaining detailed call logs and communication records in debt collection?

Answer: To demonstrate compliance with FDCPA requirements and provide evidence in disputes or litigation

Thorough records serve as the primary defense in FDCPA claims, proving that communications occurred within legal parameters and that required disclosures were made.

A consumer requests all future communications be made only through their attorney. The collector must:

Answer: Direct all future communications to the consumer's attorney and cease direct consumer contact

When a consumer notifies a collector that they are represented by an attorney, the FDCPA requires all subsequent communications to go through the attorney, not directly to the consumer.