Rise in local council use of debt recovery agencies

According to recent figures obtained via freedom of information requests by the civil liberties campaign group Big Brother Watch claims that 318 local authorities in England, Scotland and Wales engaged third–party debt recovery agencies with a total of 5,939,003 cases between 2007-08 and 2009-10.

The figures are nothing short of staggering and don’t even include those cases brought about from HMRC instructing third–party debt recovery agencies under its remit to recovery monies owed.

Big Brother Watch were concerned that the marked rise in council appointed bailiffs would in turn lead to a marked increase in cases of and complaints about bailiffs harassing or intimidating those who owe money, charging excessive fees and threatening debtors with time in jail as previous complaints have indicated.

A spokesman for the Liverpool borough of Sefton, which is in the top 10 for its use of third–party debt recovery agents and bailiffs said it only instructs bailiffs as a last resort.

He said: “Like all local authorities we are required to collect council tax by law and often face scrutiny from the media, council taxpayers and others about our effectiveness in chasing up non-payment.

“As far as council tax and parking enforcement are concerned, people are given several opportunities to pay up before the debt recovery process begins and bailiffs are only used when other avenues have been exhausted.

“If people are having difficulty making payments we would always encourage them to contact us at the earliest opportunity to see what support we can offer.”

Directly challenging Big Brother Watches comments of “aggressive tactics”, Sefton council insisted aggressive tactics are not used and the spokesman added: “Bailiffs have to follow a strict Code of Practice and are also closely monitored by the council.”

Whilst many members of the public may empathise with Big Brother Watch’s standpoint there is probably an equal or greater amount of the public that would argue that they pay their taxes (be they council tax or income tax) and parking fines so why should others get away with not paying?

With so much scrutiny on the government to justify the spending cuts and reduce the national debt, it is hard to see that those avoiding the payment of council tax, income tax and fines will get much sympathy. As the Sefton Council spokesperson suggests, if affordability is an issue, get in contact and come to an agreement as the inefficiencies of councils is also under intense scrutiny and if anything, the use of third–party debt recovery agents will only increase, rather than subside.

The worry is that if past experience is anything to judge the public sector on, their handling of data has been at best, shoddy and that tens or hundreds of thousands of individuals and commercial entities may find themselves at the mercy of third–party debt recovery agencies and debt collection agents and/or bailiffs based on incorrect data.

With recent news on a new professional compliance audit to improve the quality and reputation of firms operating in the debt sale and debt purchase industry by Debt Buyers and Sellers Group (DBSG), which is part of the Credit Services Association (CSA) it will be interesting to see how the government will react to such data quality issues at its own doorstep?

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