PCS Collection Strategies & Methods 2 — Questions and Answers
Question 1: When a debtor disputes a debt in writing within 30 days of initial notice, what is the collector's required next step under the FDCPA?
- Continue collection activity while investigating
- Cease collection until verification is mailed to the debtor (Correct answer)
- Report the dispute to the credit bureaus immediately
- Transfer the account to an attorney
Correct answer: Cease collection until verification is mailed to the debtor
Under FDCPA §809(b), the collector must cease collection activity until debt verification is obtained and mailed to the debtor.
Question 2: Which collection strategy prioritizes accounts most likely to produce payment based on statistical scoring models?
- Chronological placement
- Segmentation and scoring (Correct answer)
- Blanket dialing campaigns
- First-in first-out queuing
Correct answer: Segmentation and scoring
Segmentation and scoring uses statistical models to rank accounts by recovery likelihood, focusing resources on highest-yield accounts first.
Question 3: A collector calls a debtor's workplace and the employer answers. The collector may NOT:
- Ask to speak with the debtor
- Leave a callback number
- State the name of their agency
- Reveal the call is about debt collection (Correct answer)
Correct answer: Reveal the call is about debt collection
Disclosing to a third party that the call concerns debt collection violates FDCPA §805(b) prohibitions on third-party disclosure.
Question 4: What is the primary purpose of a 'mini-Miranda' warning in debt collection calls?
- To comply with state licensing laws
- To inform the debtor this is a debt collection attempt and information will be used for that purpose (Correct answer)
- To obtain recorded consent for call monitoring
- To satisfy Regulation F's call frequency rules
Correct answer: To inform the debtor this is a debt collection attempt and information will be used for that purpose
The mini-Miranda, required by FDCPA §807(11), discloses that the communication is from a debt collector and information will be used to collect the debt.
Question 5: Under Regulation F, how many times may a debt collector call a consumer about a specific debt within a seven-day period?
- No more than 2 times
- No more than 7 times (Correct answer)
- No more than 3 times
- No limit if calls are not answered
Correct answer: No more than 7 times
Regulation F establishes a safe harbor presumption that calling more than 7 times in 7 days is harassment, creating a bright-line call frequency cap.
Question 6: Which payment arrangement strategy is best suited for a debtor with irregular income, such as a commissioned salesperson?
- Fixed weekly installments
- Income-percentage-based payments tied to pay periods (Correct answer)
- Lump sum settlement demand only
- Automatic monthly ACH on a fixed date
Correct answer: Income-percentage-based payments tied to pay periods
Flexible payment schedules tied to income cycles reduce default risk for debtors with variable pay by aligning obligations to actual cash flow.
Question 7: A collector discovers a debtor's new address through skip tracing. Under the FDCPA, communications sent to that address must:
- Include the collector's physical address on the envelope
- Be sent without any external marking identifying it as debt-related (Correct answer)
- Include a return address that reveals the collection agency's name
- 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.
PCS Collection Strategies & Methods 2
When a debtor disputes a debt in writing within 30 days of initial notice, what is the collector's required next step under the FDCPA?