Every day in communities all across America there are opportunities for new business lines and creative approaches to what had been traditional collection markets. The name of the game today is definitely thinking outside of the box and collection firms are reassessing the markets they want to service. Much of what is driving this outreach to new products are the compliance challenges plaguing our organizations seemingly from all directions. Just when we think we have a firm grip on how to operate compliantly, a new hurdle presents itself and we are back to the proverbial drawing board. We lament following a new rule as that mandate may conflict with another regulation. A good recent example of significant change for our third-party organizations are the recent revisions to the New York State Debt Collection Regulations.
This issue of Collection Advisor focuses on government and municipal collection markets. This has been somewhat of a niche market for many years but is attracting the curiosity of firms as they rethink their marketplace. I would like to address municipal collections in particular with the hope our readers might reach out to their regional municipalities to discuss how their organizations can assist. First let’s take a look at what constitutes municipal collections. Specific products can include:
■ Parking/Traffic Violations
■ Red light camera citations
■ Building code violations
■ Local ordinance infractions
■ EMS billings
■ Utility bills (Water, Sewer, Electric, Garbage)
■ Miscellaneous fines and infractions
■ County prison fees
■ Recycling program fees
Take a moment to brainstorm in your office with your staff relative to the types of bills issued by your municipalities. These fees can vary pretty significantly from state to state, county to county and individual local municipality to local municipality. You’ll need to have a strong client service program in place to monitor the special needs of these clients but the customization can be well worth the efforts. Here are further explanations about some of these business lines:
Parking/Traffic Violations
I’m pretty certain all of our readers have been on the receiving side of a parking ticket for an expired meter or perhaps driving just a few miles over the speed limit. Municipalities issue many of these tickets every day. The value in this proposition is the ongoing nature of the business. These fines help fund many community programs and there is virtually a guarantee the volume will continue perpetually.
EMS Billings
For those of you medical recovery experts, you will fit into this segment nicely. Many communities offer emergency management services and find a growing AR. This will be an easy transition for your organization with no significant learning curve.
Water and Sewer Bills
These two utilities often go hand in hand with sewer bills assessed based on the amount of water consumption. There can be many county and state regulations on the ultimate termination/suspension of these services so your organization will have to get up to speed with these rules. This is definitely a segment where expanded services like posting termination notices on properties can be added to your offerings. In today’s collection world we struggle to obtain leverage in the collection process. Terminating water/sewer service gives the collection function a tremendous boost as this process unfolds.
County Prison Fees
This is an area of surprise for most collection firms. Many prisons actually charge a set per diem charge for every day of incarceration. Adequate funding for prisons has been tight over recent years and these costs are partially mitigated by assessed per diem charges. A fee of $15.00/day is very common. If a prisoner is incarcerated for 30 days they depart the facility with a $450 tab and often upon exit they do not possess the funds necessary for payment. Many of these individuals will eventually try to get back on their feet and will settle their balances.
Many of the markets we service in collections are obvious. Municipal collections are often on the fringes of our search for new business and might serve as a productive new opportunity for your organization. Perhaps there is great promise for new product development right under your feet as you walk about your community. Embark on a new sewer fee collection division in your firm and you just might end up flushed with new business!
We encourage our readers to submit a “best practice” idea for inclusion in this column. Until next time, I’m in a collection office near you!
Harry A. Strausser III is the President of Interact Training and Development. He can be reached at