PCS State & Federal Collection Laws 3 — Questions and Answers
Question 1: Which statement about state statute of limitations on debt collection lawsuits is CORRECT?
- The FDCPA sets a single national statute of limitations for all debt types
- States set their own statutes of limitations, which vary by debt type (Correct answer)
- Once a debt is sold, the statute of limitations resets from the sale date
- Making a payment always resets the statute of limitations in every state
Correct answer: States set their own statutes of limitations, which vary by debt type
Each state sets its own limitations periods, which can vary significantly based on the type of debt (written contract, open account, etc.).
Question 2: A collector threatens to sue a consumer on a time-barred debt without disclosing that the debt is past the statute of limitations. This likely violates which provision of the FDCPA?
- Section 805 — communication in connection with debt collection
- Section 807 — false, deceptive, or misleading representations (Correct answer)
- Section 809 — validation of debts
- Section 811 — legal actions by debt collectors
Correct answer: Section 807 — false, deceptive, or misleading representations
Threatening a lawsuit on a time-barred debt without disclosing that fact is considered a false or deceptive representation under Section 807.
Question 3: California's Rosenthal Fair Debt Collection Practices Act differs from the FDCPA in that it:
- Applies only to mortgage debts
- Also covers original creditors collecting their own debts (Correct answer)
- Requires collectors to be licensed by the IRS
- Prohibits credit reporting for debts under $500
Correct answer: Also covers original creditors collecting their own debts
The Rosenthal Act extends FDCPA-like protections to cover original creditors collecting their own consumer debts in California.
Question 4: Under the FDCPA, a debt collector may NOT deposit a postdated check before:
- 30 days after receiving the check
- The date on the check (Correct answer)
- 5 business days after providing notice to the consumer
- The debt is fully verified
Correct answer: The date on the check
Depositing or threatening to deposit a postdated check before its date is prohibited under the FDCPA.
Question 5: Which of the following is an example of a 'bona fide error' defense available to debt collectors under the FDCPA?
- Intentionally calling a consumer after a cease communication request to negotiate
- An isolated clerical error in calculating the amount owed, despite reasonable procedures (Correct answer)
- Misrepresenting the name of the original creditor to confuse the debtor
- Calling a consumer's employer without permission
Correct answer: An isolated clerical error in calculating the amount owed, despite reasonable procedures
The bona fide error defense protects collectors who violate the FDCPA due to unintentional errors made despite maintaining reasonable procedures to avoid such errors.
Question 6: Under the FDCPA, what is the maximum statutory damages a consumer can recover in an individual action against a debt collector?
- $500
- $1,000 (Correct answer)
- $2,500
- $5,000
Correct answer: $1,000
Section 813 of the FDCPA allows up to $1,000 in statutory damages per action, regardless of actual damages proven.
Question 7: Which action by a debt collector constitutes a violation of FDCPA Section 806 (harassment or abuse)?
- Mailing a dunning letter to the consumer's home address
- Placing a collect call to the debtor once per week
- Using obscene or profane language in a communication with the consumer (Correct answer)
- Reporting an unpaid debt to a credit bureau
Correct answer: Using obscene or profane language in a communication with the consumer
Section 806 explicitly prohibits the use of obscene or profane language in any communication with the consumer.
PCS State & Federal Collection Laws 3
Which statement about state statute of limitations on debt collection lawsuits is CORRECT?