Michigan Collections Manager License Practice Test

What penalties apply for FCRA violations?

1. Not less than $100 and not more than $1,000

2. Up to $10,000 per violation

3. Flat fines of $5,000

4. Warnings with no monetary penalties

The correct answer is: Not less than $100 and not more than $1,000

For violations of the Fair Credit Reporting Act (FCRA), the correct answer indicates a range of monetary penalties that can be imposed based on the nature of the violation. Specifically, it states that individuals can face penalties of not less than $100 and not more than $1,000. This range reflects the law's intention to provide a framework for compensating individuals affected by violations of their credit reporting rights, while also serving as a deterrent against improper handling of consumer credit information. Penalties in this range allow for flexibility in enforcement, enabling courts to decide on a specific penalty based on the severity and intent behind the violation as well as any damages to the consumer. Overall, this structure supports consumer protection efforts by holding violators accountable for their actions while also allowing for a graduated response depending on the circumstances of the case. In contrast, the other options present different forms of penalties that do not align with the specified framework established by the FCRA. The choice that mentions $10,000 per violation suggests a much higher penalty that is not a standard for FCRA violations. Similarly, flat fines of $5,000 or warnings without monetary penalties do not reflect the statutory range that is intended for violations under consumer credit law.