Government collections can be vastly different than traditional collections as compared to accounts such as financial services, telecom, or utilities. Namely, government or municipality debt is owed indefinitely with no statute of limitations and the debts are not dischargeable in bankruptcy. There are several key elements that need to be taken into consideration when collecting on government debts. It consists of knowing the data elements, segmentation, training, integration and data reporting.
First, it is important to know and understand the data elements of the debts that are coming across the system and eventually to the collector’s desk. A couple things to consider is whether the debt has been adjudicated and is it exempt from bankruptcy. What data fields are the client providing and are they providing enough data to make a connection to the individual from which you are looking to collect. It is important to ensure enough data points are sent over so you can identify and collect from the correct individual.
If all you collect on is government debt, then segmenting it from non-government debt isn’t an issue. However, if you are collecting multiple verticals it is important to ensure that government debt is segmented from non-government debt. There are many reasons for this. Mostly because the government debt is not governed under the Fair Debt Collection Practices Act, which allows for more leniency to collect the debt whereas non-government debt is regulated under the FDCPA and collection activity is more restrictive. Segmentation of government debt itself is also important as different types of debt generate more revenue than others. For example, traffic violations may liquidate out higher than felony debts and thus should be treated accordingly.
Another important element of government and municipalities success is training, training and more training. Since this is such a unique vertical it will require unique and continual training for all staff members which include collectors, skip tracers, client support, payment processing and all other departments. There could be several different scenarios at play when collecting in this vertical. Does the fine or fee need to be paid prior to renewing a license or obtaining a new service the individual is seeking? Often there are multiple fines and/or fees that are owed as well and it is important to adjust accordingly. There is certain collection software that allows for easy bundling of multiple accounts to make the user process seamless.
Integration is also a critical component. Your collection system must be completely in sync with the various systems your government clients are using. There are a handful of unique government- based systems used by governments and municipalities and it is imperative to know their inner workings and what is entailed with getting acclimated to the host collection system. It’s important that your collection and support staff, along with your client’s staff, are on the same page with the processes, procedures and expectations. The goal is to make the integration as easy, simple and uncomplicated as possible. The easier it is for your client to work with you and your processes the better. Look at it this way, if it isn’t easy and user-friendly then something isn’t setup correctly.
Lastly, data reporting that comes from your agency to your government clients needs to be consistent, reliable and up to par. Government clients need to know what the performance numbers are and it shouldn’t need to track you down to get them. They should be readily available and either on demand or scheduled to be sent at a specific time. Your clients will consistently be questioned about the results, performance and progress. It’s up to you to ensure they have that data available and at their disposal. Also, having a client web access portal where the client can go to look at accounts and view reports anytime is highly recommended.
Nick Jarman is the Chief Operating Officer of Credit Collection Partners, Inc. and owner of RightAway Consulting & Coaching. Jarman recently served three years on the Board of Directors for ACA International and is the past President of the Missouri Collectors Association.