PCS Consumer Rights & Protection Laws 3 — Questions and Answers
Question 1: Under Regulation E, if a consumer reports an unauthorized ATM transaction within 2 business days of learning about it, the consumer's maximum liability is:
- $0
- $50 (Correct answer)
- $500
- Unlimited
Correct answer: $50
Under Regulation E, reporting within 2 business days limits consumer liability to $50 for unauthorized electronic fund transfers.
Question 2: Which of the following debts is NOT covered under the FDCPA?
- Medical bills
- Credit card debt
- Business debts (Correct answer)
- Student loans
Correct answer: Business debts
The FDCPA covers personal, family, and household debts — it does not apply to business-purpose debts.
Question 3: The Truth in Lending Act (TILA) requires creditors to disclose the Annual Percentage Rate (APR) primarily to enable consumers to:
- Negotiate a lower principal balance
- Compare the true cost of credit across different lenders (Correct answer)
- Dispute inaccurate credit bureau entries
- Request debt verification
Correct answer: Compare the true cost of credit across different lenders
TILA's APR disclosure allows consumers to compare the actual cost of credit on a standardized basis.
Question 4: Under the FDCPA, a collector may contact a third party (other than the consumer's spouse or attorney) for what purpose?
- To disclose the debt amount and demand payment
- To locate the consumer's address or telephone number (Correct answer)
- To pressure the consumer into paying through social influence
- To confirm the consumer's employment status for garnishment planning
Correct answer: To locate the consumer's address or telephone number
Third-party contacts are permitted only to acquire location information such as the consumer's address, telephone number, or place of employment.
Question 5: Which consumer protection law specifically restricts how debt collectors may use post-dated checks from consumers?
- FCRA
- TILA
- FDCPA (Correct answer)
- GLBA
Correct answer: FDCPA
FDCPA §808(f) prohibits collectors from depositing a post-dated check before the date on the check and requires advance notice before depositing it.
Question 6: If a consumer is represented by an attorney regarding a debt, what must a debt collector do?
- Continue contacting the consumer directly until the attorney confirms in writing
- Cease all contact with the consumer and communicate only with the attorney (Correct answer)
- Contact both the consumer and the attorney simultaneously
- Send all notices to the consumer's last known address regardless
Correct answer: Cease all contact with the consumer and communicate only with the attorney
Once a collector knows the consumer is represented by an attorney, it must direct all communications to the attorney and stop contacting the consumer directly.
Question 7: The Servicemembers Civil Relief Act (SCRA) provides active-duty military consumers which key financial protection?
- Complete immunity from all debt collection
- Interest rate cap of 6% on pre-service debts (Correct answer)
- Mandatory discharge of all consumer debt upon deployment
- A 90-day moratorium on all credit reporting
Correct answer: Interest rate cap of 6% on pre-service debts
SCRA caps the interest rate on debts incurred before active duty at 6% per annum for the period of service.
PCS Consumer Rights & Protection Laws 3
Under Regulation E, if a consumer reports an unauthorized ATM transaction within 2 business days of learning about it, the consumer's maximum liability is: