NEVADA COLLECTION AGENCY MANAGER EXAM EDITION |
COMPREHENSIVE PRACTICE QUESTIONS AND CORRECT ANSWERS
WITH RATIONALES
Question 1
What information must be included in a notification of collateral disposition
Correct Answer
The date, time, and method of sale or disposition.
Question 2
What rights does a debtor have regarding collateral after default
Correct Answer
The right to redeem the collateral by paying the full amount owed.
Question 1: Under NRS Chapter 649, which individual is required to hold a
valid compliance manager’s certificate in order for a collection agency to
lawfully operate in Nevada?
A. Any collection agent who contacts debtors by telephone
B. The owner of the collection agency, regardless of involvement in daily operations
C. The designated compliance manager who shares responsibility for the collection
operations of the agency
D. Every employee who handles trust account deposits
CORRECT ANSWER: C. The designated compliance manager who shares
responsibility for the collection operations of the agency
Rationale: NRS 649.175 and 649.305 require that no person may serve as the
manager of a collection agency unless holding a valid compliance manager’s
certificate, and the agency may not operate without a designated compliance
manager who participates in the oversight and compliance of the collection
operations.
Question 2: According to Nevada law, what is the minimum age requirement
for an applicant seeking a compliance manager’s certificate?
A. 18 years of age
B. 21 years of age
C. 25 years of age
D. 30 years of age
CORRECT ANSWER: B. 21 years of age
Rationale: NRS 649.196 requires every applicant for a compliance manager’s
certificate to be at least 21 years of age and to demonstrate good character,
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,competency, and the requisite experience or qualifications.
Question 3: Which federal statute is expressly incorporated by reference into
Nevada collection agency law such that a violation of it is deemed a violation
of NRS Chapter 649?
A. Truth in Lending Act
B. Fair Credit Reporting Act
C. Fair Debt Collection Practices Act
D. Equal Credit Opportunity Act
CORRECT ANSWER: C. Fair Debt Collection Practices Act
Rationale: NRS 649.370 provides that any violation of the federal Fair Debt
Collection Practices Act or its implementing regulations constitutes a violation of
Chapter 649.
Question 4: A collection agency licensed in Nevada must maintain a trust
account. Where must that trust account be located?
A. In any federally insured bank in the United States
B. In a bank or credit union located in the State of Nevada
C. In the state where the majority of the agency’s debtors reside
D. In the state of the agency’s corporate headquarters
CORRECT ANSWER: B. In a bank or credit union located in the State of Nevada
Rationale: NRS 649.355 requires every licensee to maintain a separate trust account
in a bank or credit union located in Nevada that is clearly designated as a
customers’ trust fund account and that at all times contains sufficient funds to pay
all amounts due to customers.
Question 5: How frequently must a Nevada collection agency remit collected
funds to the respective creditors?
A. Within 15 days after receipt
B. Within 30 days following the end of the month in which payment is received
C. Within 45 days of deposit into the trust account
D. Quarterly, on a calendar-quarter basis
CORRECT ANSWER: B. Within 30 days following the end of the month in which
payment is received
Rationale: NRS 649.355 mandates that money collected must be remitted to the
creditors entitled thereto within 30 days following the end of the month in which
the payment is received.
Question 6: Under NRS 649.375, which of the following is a prohibited practice
for a collection agency or its compliance manager?
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,A. Using a collection letter that simulates a legal process or purports to be from a
government authority
B. Contacting a debtor between 8:00 a.m. and 9:00 p.m. local time
C. Requesting verification of a debt after receiving a written dispute
D. Maintaining records of all collections for three years
CORRECT ANSWER: A. Using a collection letter that simulates a legal process
or purports to be from a government authority
Rationale: NRS 649.375 expressly prohibits the use of any device, subterfuge,
pretense, or deceptive means, including collection letters that simulate legal process
or purport to be from any governmental authority or attorney.
Question 7: A compliance manager’s certificate is required for which of the
following roles?
A. Any person who purchases charged-off debt for collection
B. The designated individual who has direct supervisory responsibility for collection
employees and participates in the oversight and compliance of the agency
C. Every independent contractor who performs skip-tracing services
D. The corporate attorney who advises the agency on litigation
CORRECT ANSWER: B. The designated individual who has direct supervisory
responsibility for collection employees and participates in the oversight and
compliance of the agency
Rationale: NAC 649.210 and NRS 649.028 define the compliance manager as the
certificate holder who must have direct supervisory responsibility for employees
engaged in collections and must participate in the actual oversight and compliance
of the collection agency.
Question 8: What is the general statute of limitations for bringing an action on
a written contract in Nevada that is relevant to debt collection?
A. Two years
B. Three years
C. Four years
D. Six years
CORRECT ANSWER: D. Six years
Rationale: Under Nevada law, actions on written contracts generally must be
commenced within six years, and collection agencies are prohibited from suing on
time-barred debts when they know or should know the statute has expired.
Question 9: Which entity issues licenses to collection agencies and compliance
manager certificates in Nevada?
A. Nevada Secretary of State
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, B. Nevada Attorney General’s Office
C. Commissioner of Financial Institutions
D. Nevada Department of Business and Industry Consumer Affairs Division
CORRECT ANSWER: C. Commissioner of Financial Institutions
Rationale: NRS Chapter 649 places licensing, examination, and regulatory authority
over collection agencies and compliance managers under the Commissioner of
Financial Institutions within the Division of Financial Institutions.
Question 10: An applicant for a compliance manager’s certificate must
generally demonstrate how many years of full-time experience in collections
or related compliance work?
A. One year
B. Two years, with at least one year within the preceding 18-month period
C. Three years of continuous experience
D. Five years of managerial experience
CORRECT ANSWER: B. Two years, with at least one year within the preceding
18-month period
Rationale: NRS 649.196 requires not less than two years’ full-time experience with a
collection agency (or qualifying alternative), of which at least one year must have
occurred within the 18 months preceding the application.
Question 11: Under Nevada law, may a single individual serve as the
designated compliance manager for more than one primary collection agency
at the same time?
A. Yes, without restriction
B. Yes, if both agencies are under common ownership
C. No, a person may not serve as compliance manager of more than one primary
collection agency simultaneously
D. Yes, provided the Commissioner grants prior written approval
CORRECT ANSWER: C. No, a person may not serve as compliance manager of
more than one primary collection agency simultaneously
Rationale: NAC 649.220 and related statutory provisions restrict a compliance
manager from serving more than one primary collection agency at the same time,
and further prohibit simultaneous employment as compliance manager by a
collection agency and an exempt entity.
Question 12: What must a Nevada collection agency display on any Internet
website it maintains?
A. Only the names of its collection agents
B. The license number of the agency and the certificate identification number of its
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COMPREHENSIVE PRACTICE QUESTIONS AND CORRECT ANSWERS
WITH RATIONALES
Question 1
What information must be included in a notification of collateral disposition
Correct Answer
The date, time, and method of sale or disposition.
Question 2
What rights does a debtor have regarding collateral after default
Correct Answer
The right to redeem the collateral by paying the full amount owed.
Question 1: Under NRS Chapter 649, which individual is required to hold a
valid compliance manager’s certificate in order for a collection agency to
lawfully operate in Nevada?
A. Any collection agent who contacts debtors by telephone
B. The owner of the collection agency, regardless of involvement in daily operations
C. The designated compliance manager who shares responsibility for the collection
operations of the agency
D. Every employee who handles trust account deposits
CORRECT ANSWER: C. The designated compliance manager who shares
responsibility for the collection operations of the agency
Rationale: NRS 649.175 and 649.305 require that no person may serve as the
manager of a collection agency unless holding a valid compliance manager’s
certificate, and the agency may not operate without a designated compliance
manager who participates in the oversight and compliance of the collection
operations.
Question 2: According to Nevada law, what is the minimum age requirement
for an applicant seeking a compliance manager’s certificate?
A. 18 years of age
B. 21 years of age
C. 25 years of age
D. 30 years of age
CORRECT ANSWER: B. 21 years of age
Rationale: NRS 649.196 requires every applicant for a compliance manager’s
certificate to be at least 21 years of age and to demonstrate good character,
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,competency, and the requisite experience or qualifications.
Question 3: Which federal statute is expressly incorporated by reference into
Nevada collection agency law such that a violation of it is deemed a violation
of NRS Chapter 649?
A. Truth in Lending Act
B. Fair Credit Reporting Act
C. Fair Debt Collection Practices Act
D. Equal Credit Opportunity Act
CORRECT ANSWER: C. Fair Debt Collection Practices Act
Rationale: NRS 649.370 provides that any violation of the federal Fair Debt
Collection Practices Act or its implementing regulations constitutes a violation of
Chapter 649.
Question 4: A collection agency licensed in Nevada must maintain a trust
account. Where must that trust account be located?
A. In any federally insured bank in the United States
B. In a bank or credit union located in the State of Nevada
C. In the state where the majority of the agency’s debtors reside
D. In the state of the agency’s corporate headquarters
CORRECT ANSWER: B. In a bank or credit union located in the State of Nevada
Rationale: NRS 649.355 requires every licensee to maintain a separate trust account
in a bank or credit union located in Nevada that is clearly designated as a
customers’ trust fund account and that at all times contains sufficient funds to pay
all amounts due to customers.
Question 5: How frequently must a Nevada collection agency remit collected
funds to the respective creditors?
A. Within 15 days after receipt
B. Within 30 days following the end of the month in which payment is received
C. Within 45 days of deposit into the trust account
D. Quarterly, on a calendar-quarter basis
CORRECT ANSWER: B. Within 30 days following the end of the month in which
payment is received
Rationale: NRS 649.355 mandates that money collected must be remitted to the
creditors entitled thereto within 30 days following the end of the month in which
the payment is received.
Question 6: Under NRS 649.375, which of the following is a prohibited practice
for a collection agency or its compliance manager?
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,A. Using a collection letter that simulates a legal process or purports to be from a
government authority
B. Contacting a debtor between 8:00 a.m. and 9:00 p.m. local time
C. Requesting verification of a debt after receiving a written dispute
D. Maintaining records of all collections for three years
CORRECT ANSWER: A. Using a collection letter that simulates a legal process
or purports to be from a government authority
Rationale: NRS 649.375 expressly prohibits the use of any device, subterfuge,
pretense, or deceptive means, including collection letters that simulate legal process
or purport to be from any governmental authority or attorney.
Question 7: A compliance manager’s certificate is required for which of the
following roles?
A. Any person who purchases charged-off debt for collection
B. The designated individual who has direct supervisory responsibility for collection
employees and participates in the oversight and compliance of the agency
C. Every independent contractor who performs skip-tracing services
D. The corporate attorney who advises the agency on litigation
CORRECT ANSWER: B. The designated individual who has direct supervisory
responsibility for collection employees and participates in the oversight and
compliance of the agency
Rationale: NAC 649.210 and NRS 649.028 define the compliance manager as the
certificate holder who must have direct supervisory responsibility for employees
engaged in collections and must participate in the actual oversight and compliance
of the collection agency.
Question 8: What is the general statute of limitations for bringing an action on
a written contract in Nevada that is relevant to debt collection?
A. Two years
B. Three years
C. Four years
D. Six years
CORRECT ANSWER: D. Six years
Rationale: Under Nevada law, actions on written contracts generally must be
commenced within six years, and collection agencies are prohibited from suing on
time-barred debts when they know or should know the statute has expired.
Question 9: Which entity issues licenses to collection agencies and compliance
manager certificates in Nevada?
A. Nevada Secretary of State
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, B. Nevada Attorney General’s Office
C. Commissioner of Financial Institutions
D. Nevada Department of Business and Industry Consumer Affairs Division
CORRECT ANSWER: C. Commissioner of Financial Institutions
Rationale: NRS Chapter 649 places licensing, examination, and regulatory authority
over collection agencies and compliance managers under the Commissioner of
Financial Institutions within the Division of Financial Institutions.
Question 10: An applicant for a compliance manager’s certificate must
generally demonstrate how many years of full-time experience in collections
or related compliance work?
A. One year
B. Two years, with at least one year within the preceding 18-month period
C. Three years of continuous experience
D. Five years of managerial experience
CORRECT ANSWER: B. Two years, with at least one year within the preceding
18-month period
Rationale: NRS 649.196 requires not less than two years’ full-time experience with a
collection agency (or qualifying alternative), of which at least one year must have
occurred within the 18 months preceding the application.
Question 11: Under Nevada law, may a single individual serve as the
designated compliance manager for more than one primary collection agency
at the same time?
A. Yes, without restriction
B. Yes, if both agencies are under common ownership
C. No, a person may not serve as compliance manager of more than one primary
collection agency simultaneously
D. Yes, provided the Commissioner grants prior written approval
CORRECT ANSWER: C. No, a person may not serve as compliance manager of
more than one primary collection agency simultaneously
Rationale: NAC 649.220 and related statutory provisions restrict a compliance
manager from serving more than one primary collection agency at the same time,
and further prohibit simultaneous employment as compliance manager by a
collection agency and an exempt entity.
Question 12: What must a Nevada collection agency display on any Internet
website it maintains?
A. Only the names of its collection agents
B. The license number of the agency and the certificate identification number of its
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