Tracking down debtors
Each year, billions of dollars worth of fees for local government services go uncollected. According to the National Association of Counties, local governments nationwide carry $40 billion in delinquent accounts for utility bills, court fines, taxes and other receivables. Two years ago, Georgia cities carried an estimated $20 million in delinquent accounts, but many lacked enough staff or centralized collection offices to handle the volume of accounts needing attention.
In April 2005, the Georgia Municipal Association contracted with Birmingham, Ala.-based RDS to recover aged debt for more than 500 association members. Cities that enroll in the program transfer their delinquent account data — in electronic or printed form — to the firm to begin collections. The accounts that are “void of statute” based on state and federal laws are identified, and bankrupt consumer accounts are closed and returned. A first notice/validation notice is then generated and mailed to every remaining debtor.
Concurrent with the mailing of first notices, all account holders are called using an interactive voice recognition automated dialer system. Debtors that cannot be reached by phone and that do not respond to first notices are located using skip-tracing tools.
As debt is collected and processed, the revenues are disbursed to the municipalities, which pay for the service based on the amount of debt and age of accounts with no previous collection history. Member cities can access a secure Web site to view the status of each account submitted for collection. “Checking on the status of past due debt has never been more easy,” says Missy Edenfield, accounting clerk for Metter, Ga. “The software program is very user friendly and easy to understand. We can run reports on files at any time [as] many times [as] we need, which is a plus for us.”
Currently, 35 Georgia jurisdictions use the program, which had netted $377,319 as of May 2007. Moultrie, Ga., recovered more than $4,000 with just one delinquent account, while Cartersville recently retrieved more than $8,500 from a single debtor. More than 40 percent of Peachtree City’s $27,185 in stormwater utilities debt has been recovered, even though many Social Security numbers and phone numbers were unavailable.
Birmingham, Ala.-based RDS
A percentage of recovered fees