COLLECTIONS MANAGEMENT APRIL 2022 PAST PAPER

TUESDAY: 5 April 2022. Morning paper.              Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.

QUESTION ONE

  1. Outline five advantages of establishing an Internal Debt Collection Unit. (5 marks)
  2. Analyse four methods of improving debt collection negotiations. (8 marks)
  3. List three goals of a debt collection department. (3 marks)
  4.  Summarise four online debt collection techniques. (4 marks)

(Total: 20 marks)

QUESTION TWO

1. With reference to debt buying companies:

Explain a debt validation notice. (2 marks)

Summarise four contents of a debt validation notice. (4 marks)

2. Discuss four shortcomings of arbitration as an Alternative Dispute Resolutions (ADR) in debt collection. (8 marks)

3. Describe three factors influencing the choice of a debt collection method. (6 marks)

(Total: 20 marks)

QUESTION THREE

1. Outline five characteristics of accounts that should be handed over to a debt collection agency.  (5 marks)

2. The corona virus crisis has seen many credit collections teams dealing with escalating cases of Non Performing Assets (NPA), changing regulatory guidelines, high customer expectations and overstretched resources. With reference to the above statement, suggest four ways by which a credit manager could develop a proactive collection response plan to mitigate the effects of COVID-19 on accounts receivable. (8 marks)

3. Identify four types of credit reports used to improve the process of debt collection. (4 marks)

4. Assess three benefits of loan restructuring. (3 marks)

(Total: 20 marks)

QUESTION FOUR

1. With reference to skiptracing, explain the following terms:

Unintentional skip. (2 marks)

Novice deadbeats. (2 marks)

Hard-core skips. (2 marks)

2. Discuss five aspects of the code of conduct that a credit manager is expected to include in a debt collection manual. (10 marks)

3. Summarise four duties of remitting banks. (4 marks)

(Total: 20 marks)

QUESTION FIVE

1. Analyse the four successive steps in an exchange of documents in a documentary credit procedure. (8 marks)

2. Examine three elements of a negotiations checklist. (6 marks)

3. Describe six features of a customer contact center software. (6 marks)

(Total: 20 marks)

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