Collections & Recovery Strategies Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Collections & Recovery Strategies flashcards as text
What is the primary legal risk of collecting on a 'zombie debt' — a debt beyond the applicable statute of limitations?
Answer: Filing suit on a time-barred debt can violate the FDCPA
Suing or threatening to sue on a time-barred debt is considered a deceptive and unfair collection practice under the FDCPA.
Which tool measures how quickly a company converts its receivables to cash?
Answer: Days Sales Outstanding (DSO)
DSO measures the average number of days it takes to collect payment after a sale, reflecting collections effectiveness.
A collections manager implements a 'waterfall' agency strategy. This means:
Answer: Sequentially transferring unrecovered accounts through multiple agencies ranked by performance
A waterfall strategy routes accounts to a ranked tier of agencies, with unresolved accounts passed down to successively lower-tier collectors.
Under Regulation F (implementing the FDCPA), which communication method requires the consumer to have provided prior consent before the collector may use it?
Answer: Email and text messages
Regulation F requires that collectors obtain prior consent — or a court order — before contacting consumers via email or text message.
When a debtor makes a partial payment on a time-barred debt in a state that recognizes 'partial payment revival,' what is the consequence?
Answer: The statute of limitations may restart from the date of the payment
In some states, a partial payment or written acknowledgment of a time-barred debt revives the statute of limitations, restarting the legal collection clock.
Which internal control best reduces the risk of collector misconduct and ensures FDCPA compliance in a collections department?
Answer: Recording and randomly auditing collector calls
Call recording and random auditing allow management to detect prohibited practices early and provide corrective training.
A creditor accelerates a loan after the borrower misses three consecutive payments. Acceleration means:
Answer: The entire remaining balance becomes immediately due and payable
Acceleration causes the full outstanding balance — not just past-due amounts — to become due immediately upon default.