CVA Reporting Procedures & Ethical Practices 2 — Questions and Answers
Question 1: A verification agent discovers that a document submitted for income verification appears to have been altered. What is the FIRST ethical obligation?
- Approve the file to avoid delays
- Document the discrepancy and escalate to a supervisor or compliance team (Correct answer)
- Reject the application without documentation
- Contact the applicant directly to ask for an explanation
Correct answer: Document the discrepancy and escalate to a supervisor or compliance team
Agents must document suspected fraud and escalate through proper channels rather than acting unilaterally or ignoring the issue.
Question 2: Which reporting standard requires verification agents to maintain an audit trail of all verification decisions?
- FCRA Section 602
- SOC 2 compliance only
- Internal chain-of-custody documentation standards (Correct answer)
- HIPAA Privacy Rule
Correct answer: Internal chain-of-custody documentation standards
Internal chain-of-custody documentation ensures every verification decision can be traced, reviewed, and defended if challenged.
Question 3: When a verification agent receives conflicting information from two sources about the same subject, the proper course of action is to:
- Accept the source that favors the applicant
- Accept the most recent source without note
- Flag the conflict in the report and note both sources (Correct answer)
- Discard both sources and request new documentation
Correct answer: Flag the conflict in the report and note both sources
Conflicting data must be transparently reported so downstream decision-makers have full context.
Question 4: Under the FCRA, a Consumer Reporting Agency (CRA) must provide adverse action notices within what timeframe after a consumer disputes information?
- 5 business days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
The FCRA requires CRAs to complete reinvestigation of disputed information within 30 days (extendable to 45 with additional consumer information).
Question 5: Which of the following actions would be considered a breach of a verification agent's ethical duty?
- Documenting an unverifiable piece of information as unverified
- Sharing confidential applicant data with an unauthorized third party (Correct answer)
- Requesting a second source to corroborate income
- Flagging a document for supervisor review
Correct answer: Sharing confidential applicant data with an unauthorized third party
Sharing confidential data with unauthorized parties violates privacy laws and professional ethics codes.
Question 6: A report prepared by a verification agent should use language that is best described as:
- Opinionated and interpretive
- Objective, factual, and free of personal bias (Correct answer)
- Favorable to the requesting client
- Written in the applicant's perspective
Correct answer: Objective, factual, and free of personal bias
Verification reports must be objective and factual to maintain credibility and legal defensibility.
Question 7: If a verification agent is asked by a client to 'look the other way' on a minor discrepancy, the agent should:
- Comply if the discrepancy is minor
- Refuse and document the client's request (Correct answer)
- Escalate only if the discrepancy is major
- Ask the applicant to correct the record quietly
Correct answer: Refuse and document the client's request
Agents must refuse unethical instructions and document them to protect themselves and maintain compliance.
CVA Reporting Procedures & Ethical Practices 2
A verification agent discovers that a document submitted for income verification appears to have been altered.
What is the FIRST ethical obligation?