Local, State, and Federal Government Debt Collection Report
An Industry Primer from insideARM.com
Published: Fall 2011
Immediate delivery as electronic PDF file
If you are thinking about getting into --or expanding within-- the government collections sector, this report will help you.
Do you understand the nuances of working with government clients? Do you have an appreciation of their special circumstances, and how to work with public officials to address their needs? Do you have a sense of the best opportunities for your agency to break into this growing collections segment? Read on.
You’ll Get 10 Tips to Prosper in Collecting for Government Clients
There are thousands of local government agencies with outstanding past due receivables and few resources with which to collect. Some public bodies have already established flexible relationships with vetted collections firms; many have not.
You’ll find advice from those who’ve already successfully won and administered government collection bids.
Learn the Actual Size of the Market for Government Collections
It is clear to many that the market for government collections is significant, and relatively untapped when compared to other collections segments such as credit cards or telecom. In just the last year a wide range of estimates ranging from $15 billion to $200 billion have been made of outstanding government debt available to be collected. No doubt, the estimates are based on a variety of assumptions which include or exclude agencies at the town, city, court, county, state, and federal levels. There doesn’t seem to be a definitive and centralized list of all agencies at all levels of government that hold past due receivables.
This report dives into the various levels of government to develop a comprehensive estimate of the size of this burgeoning opportunity.
Breaking down the Billions – Get Insight into Where the Opportunities Lie
What do you do with this comprehensive estimate? Where do the best opportunities lie within this vast market? How do government agencies go about collecting delinquent receivables now?
Local, State and Federal Government Debt Collection, an Industry Primer from insideARM.com gives you a detailed overview of the largest opportunities in the Federal government, which agencies have the most delinquent receivables, and the programs currently in place to collect on them. You will also find summaries of several primary research studies on the state and local collections market and the specific types of debt for which government agencies are most likely to be open to help from private collection firms.
Note: The student loan/Dept of ED collections market is included in the market size discussion, but not other sections of this report. We felt it deserved its own separate coverage, which will be published at a later date.
Learn from the Past - Recent News Events in Government Collections
Wonder what’s happened since the fall of the IRS private debt collection program? We’ll recap the whole, sordid affair, and give you an update of where the IRS stands without participation from private debt collectors.
Getting into the government market for the first time? Remember that incentives that work for private creditors are not always appropriate for public employees. Indeed, they can get you into big trouble. We revisit a big story from a couple of years ago with an important lesson, and also let you know where things stand today.
Browse Specific Examples of State and Local Collections Initiatives
In the years following the cancellation of the IRS private collections program, a slew of stories began to appear about local and state governments turning to private debt collectors to assist with past due debt collection, as well as with broader services like administration of sales taxes. It’s not that this work hadn’t existed at the local level before 2009-2010; we’ve just seen a material uptick in the level of interest and activity in the last 18-24 months.
This increased level of government collection activity is no surprise. Local and state governments have seen their revenue – and subsequently their payroll – bases slashed in the past several years. There is no longer the ability to raise taxes, so revenue must come from somewhere, including more effective recovery of what’s already owed.
Browse about two dozen examples of state and local programs to collect past due fines, fees, and more.
Table of Contents
Getting Started: 10 Tips to Prosper in Collecting for Government Clients. 6
What is the Size of the Market for Government Collections?. 9
The Calculation. 16
Digging into Federal Receivables. 17
Overview of Government-wide Debt Collection Initiatives. 20
State & Local Receivables. 23
Opportunity for Private Collection Agencies?. 26
Who is Better Equipped to Collect – Government Employees or Private Collectors?. 28
Recent News Events in Government Collections, and their Status Today. 33
News Event: The Fall of the IRS Private Debt Collection Program. 34
News Event: OSI Employees and State Officials Indicted in Overbilling and Bribery Scandal. 57
Trend: Local Governments Hire ARM Companies at Rapid Pace. 63
Model Collections Program Expands Services State Will Buy. 64
A Snapshot of Oregon’s Delinquency Data. 66
State Government, Collection Agency Agree to Increase Oversight on Contract. 67
Will Government Debt Collectors Get Paid in a Federal Debt Default?. 68
Governments Aren’t Collecting their Commercial Debt. 70
Indiana County Just Realizing it Needs to Collect $1m in Child Support Docket Fees. 72
Media Taking Note of Need for Government Debt Collection. 74
In Our Opinion: State’s Debt-Collection Blind Spot is Unacceptable. 75
Texas Collection Agency Riles Up the Hawai’ians. 76
Vermont to Use Collection Agency for Past Due Fines. 76
Local Governments in Peril; ARM Industry Could Help. 78
City of Semmes Partners With Revenue Discovery Systems to Administer Local Sales Tax. 80
Collection Agency Recovers $350,000 for County in Two Years. 82
Chicagoland County Hires Collection Agency to Go After Traffic Fine Debt. 83
Rewards and Incentives for Government Debt Collectors?. 84
Government Collection Professionals Invited to St. Louis. 86
The City of Guntersville Receives Smart Government Honor from Revenue Discovery Systems. 88
State and Local Focus to Drive Government ARM Expansion. 89
Third Party Debt Collectors an Important Partner in the Recovery of Government-Owned Debt. 92
Albany, NY Issues RFP for Debt Collection Services. 94
Budget Cuts Expanding Government ARM Sector. 95
MSB Signs Statewide Collection Agreement with Colorado Judicial Branch. 97
City of Fairhope Partners With Revenue Discovery Systems (RDS) to Administer Local Sales Tax. 98
District Court Awards Collection Contract to Capital Recovery Systems. 100
Town Goes with MSB for its One Stop Solution for Collections and Payment Processing. 101
Courts Today and Government Revenue Collection Association Team Up to Improve Government Collections 102
MSB Jumps in to Help Governments Reduce Costs. 104
Government Collections Look to Rise: Execs. 106
Trend: White-Collar Debt; a New Specialty?. 107
Background Resources for Government Collections. 109
Number of Local Governments by State and Type: 2007. 111