Billing and Debt Collection Practices Quiz

Test your knowledge on debt collection methods, laws like FDCPA, billing terms, and illegal practices. Take the quiz now!

Practice Learn Test

Which of the following is NOT a common billing method?

Hourly rate

Flat fee

Variable rate

Monthly donation

What does 'net 30' refer to in billing terms?

Payment is due within 30 days of invoice date

Payment is due immediately upon receipt of invoice

Payment is due within 30 days of service completion

Payment is due within 30 hours of invoice date

What is the Fair Debt Collection Practices Act (FDCPA) designed to do?

Protect consumers from abusive debt collection practices

Enable debt collectors to use any means necessary to collect debts

Allow debt collectors to harass consumers indefinitely

Eliminate consumer rights regarding debt collection

Which of the following is considered an illegal debt collection practice?

Contacting a debtor during reasonable hours

Threatening legal action that cannot be taken

Providing accurate information about the debt

Respecting a debtor's request to cease communication

What does 'charge-off' mean in the context of debt collection?

The debt is forgiven and no longer needs to be paid

The debt is transferred to a different collection agency

The creditor declares the debt as unlikely to be collected

The debt is settled through a payment plan

What is a 'wage garnishment' in the context of debt collection?

A process where the debtor's wages are withheld to repay a debt

A negotiation tactic used by debt collectors

A type of loan given to debtors

An agreement to forgive a portion of the debt

What is the purpose of a 'cease and desist' letter in debt collection?

To demand immediate payment from the debtor

To threaten legal action against the debtor

To instruct the debtor to stop contacting the creditor

To inform the debtor about debt settlement options

Which of the following is NOT a step typically involved in debt collection?

Sending reminder letters

Threatening physical harm

Making phone calls

Negotiating payment plans

What is the statute of limitations for debt collection in the United States?

It varies by state and type of debt

There is no statute of limitations

10 years from the date of last activity

5 years from the date of last activity

#10

Which federal agency enforces the Fair Debt Collection Practices Act (FDCPA)?

Federal Trade Commission (FTC)

Internal Revenue Service (IRS)

Consumer Financial Protection Bureau (CFPB)

Department of Justice (DOJ)

#11

In debt collection, what does the term 're-aging' refer to?

Updating a debtor's contact information

Restarting the statute of limitations on a debt

Selling the debt to another collection agency

Negotiating a lower amount to settle the debt

#12

What is the main purpose of credit reporting agencies in debt collection?

To assist debt collectors in locating debtors

To report accurate information about consumers' credit histories

To harass debtors into paying their debts

To provide loans to debtors

#13

Which of the following is a violation of the Fair Debt Collection Practices Act (FDCPA)?

Informing a debtor about their legal rights

Contacting a debtor's employer without permission

Offering a payment plan to help a debtor repay the debt

Respecting a debtor's request for validation of the debt