Debt Collection News Goes Quarterly

Tuesday, July 30, 2019 - Posted by Michael McCulloch

As most of our subscribers are aware we have released our newsletter every month for the last 10 years and have released over 550 free articles covering debt collection news around the world as well as debt collection tips and advice.

We have decided that our blog and newsletter will now be released quarterly following this issue. 

We hope that this change will result in more feature packed articles and news. If there are industry specific changes that we believe will have an impact on our industry we will release this information via our social networking channels on Facebook and LinkedIn.

We thank you for your continued support and loyalty and look forward to continuing to provide this free service.

Local Council Waives $760K in Debt

Tuesday, July 30, 2019 - Posted by Michael McCulloch

A local council in Perth has recently waived in excess of $760,000 in debt because staff overlooked referring the debts to their debt collection agency.

The Town of Victoria Park found that 11,148 unpaid fines, mainly from parking infringements, had failed to be outsourced for collection after a clerical error was discovered. Of those discovered as being unpaid 8,000 were uncollectable due to the limitation period expiring. With the oversight identified council wrote to the 1,000 of the larger unpaid debts demanding payment however only 49 were paid returning the council $6,617.

With council estimating that approximately $3,000 had been spent in attempting to recover the debts, which did not account for staff time, Councillors made the decision not to pursue the debt and agreed to write-off $767,199.13 at the June council meeting. Cr Karen Vernon stated that the unrecoverable debt was "disappointing on so many levels" as the money could have been utilised to make a difference to significant community projects or to pay down further debt owed by the council. Town of Victoria Park would not confirm to the Southern Gazette if any council staff were dismissed over the error.

In a statement to the media, Victoria Park Chief Executive Anthony Vulete said that their debt collection policy and practices were being reviewed and accepted that the situation was an administrative failure.

UK Debtors Granted 60 Day Payment Extensions

Friday, June 28, 2019 - Posted by Michael McCulloch

Debtors in the UK are to benefit from a new scheme where they will be provided 60 days grace from debt collectors and Bailiffs.

In an article that appeared in The Sun, people who are struggling with significant debt to local government bodies, such as tax arrears, personal tax debts and benefit overpayments, will have their debts frozen with all enforcement action also stopped. The scheme, which is due to be launched in 2021, is designed to provide the financially disadvantaged with time to find long-term solutions to their financial problems. During the "breathing space" period, which is what the scheme is being called, those debtors must work with professional financial counsellors to reach solutions to get back on track with their repayments.

The "breathing space" program also includes a "statutory debt repayment plan" which allows those in debt to repay debt over a more manageable period and could see monthly repayments adjust according to their disposable income.

Debt charity, StepChange, revealed in April of this year that 657,000 people had sought their assistance in 2018 and applauded the moves by HM Treasury.

Debt Collection Agency Files for Bankruptcy Protection

Friday, June 28, 2019 - Posted by Michael McCulloch

ZDNET is reporting that the debt collection agency, American Medical Collection Agency (AMCA), has filed for bankruptcy protection following a major data breach.

The breach, which is estimated to have occurred from August 2018 to March 2019, resulted in the theft of information from corporate clients which included Sunrise Laboratories, BioReference Laboratories, LabCorp and Quest Diagnostics. The companies used a portal provided by AMCA to bill their medical customers which was later found to have been stolen and advertised for sale in dark web forums.

Following the disclosure of the breach multiple class-actions werre filed against not only AMCA but also the corporate clients with victims claiming that there were unnecessary delays in informing victims. According to the Chapter 11 declaration that was filed, AMCA first became aware of the breach when a number of credit cards were linked to fraudulent transactions. While the portal was closed and an investigation launched, the data breach caused AMCA to lose a number of clients and a massive reduction in business. ACMA has since been unable to determine exactly what data has been compromised and has been forced to absorb the cost in informing several million people by mail that their data may have been stolen. It is estimated that this alone has cost ACMA US$3.8 million forcing AMCA to take out a loan just to meet this expense.

AMCA will continue trading at this point in time as they seek to pay off their Creditors.

Man Arrested for Threatening Debt Collection Staff

Friday, June 28, 2019 - Posted by Michael McCulloch

A Thirroul man who threatened harm to debt collectors has been put on a 2 year good-behaviour bond and fined $500. The man, who has been identified by the Illawarra Mercury as Daniel Scott, claimed to police that he thought the calls were from scammers however admitted that his response was an overreaction.

Queensland Casino Pursues $43 Million Debt

Monday, April 29, 2019 - Posted by Michael McCulloch

A Queensland based casino has allegedly commenced proceedings in the High Court in Singapore to recover an AUD$43.2 million debt according to mygc.com.au

The Star Entertainment Group ("The Star") invited Dr Yew Choy Wong to play at their Broadbeach, QLD casino located on the Gold Coast to play as a VIP in July 2018. Dr Wong accepted the invite and it is alleged lost AUD$43.2 million over 5 days playing baccarat. It is alleged that Dr Wong supplied The Star with a blank cheque to cover any of his losses however once he left the casino the cheque was dishonoured with Mr Wong claiming that his bank would not honour the cheque due to alleged mistakes made by the dealer throughout the length of his stay.

In a letter from The Star to Dr Wong it is alleged that the casino acknowledged that mistakes had been made however claimed that these mistakes did not have a direct financial impact upon Dr Wong, however Dr Wong claims that the letter from the casino waived the debt as a result of the mistakes made.

In a statement to the media Dr Wong's solicitor said, "Dr Wong will contest the Singapore case as a matter of principle and intends to vindicate his decision to stop payment."

Veterinary Surgeon Says Unpaid Debts is Stealing

Wednesday, February 27, 2019 - Posted by Michael McCulloch

A veterinary surgeon based in Western Australia has recently come out in the Sydney Morning Herald saying that unpaid invoices for veterinary care is ".... essentially stealing from someone".

Dr Belinda Beynon said that in January 2018 that a distressed woman approached the surgery with 2 dogs that had been bitten by snakes. Having spent 13 years working in an emergency veterinary clinic, Dr Beynon, knew that the procedure would cost the owner a minimum of $3,000. The owner claimed to be unable to pay the full balance immediately and would pay $1,500 upfront and pay the balance within the week.

With both dogs surviving treatment the surgery attempted to contact the owner by phone and mail before referring the debt to a debt collection agency who also failed in their attempts to recover the debt. Dr Beynon wrote-off the debt and put it down to a bad experience.

Recently Dr Beynon said that she had new clients come in with a dog that required treatment however was undecided if she should commence treatment or not. Dr Beynon said that while her professional judgement said to treat the animal her business owner experience told her that they couldn't afford to.

While Dr Beynon was able to eventually authorise the treatment through financial assistance she said in a statement, "What I’ve tried to explain to people in the past ... is that what a vet charges is not always related to the quality of the work that they do. I guess I would say ... if you go into a veterinary practice and you request veterinary care, and you promise to pay something and then you don’t do it, you’re not taking away someone’s holiday to Fiji or a fancy piece of jewellery. That might mean they can’t pay their kids school fees that week. They might not be able to pay the drug bill that week. They’re not getting away with something – they’re essentially stealing from someone. Perhaps if more people gave more thought to the families behind the building and the impact it has, then perhaps they might question their own motives a bit more."

China Trials Deadbeat Map To Monitor Bad Debts

Wednesday, February 27, 2019 - Posted by Michael McCulloch

Authorities in China are trialling a new app which will enable users to check on their debt status according to ABC News.

The app, which is an add-on to Chinese social media platform, WeChat, has been rolled out in the Hebei province earlier this year. Nicknamed the "Deadbeat Map" the programs allows users to pinpoint the location of those who have failed to pay their debts within a 500 metre radius. Tapping on a person marked on the map reveals personal information about the individual including their name and the reason why they have been placed on the financial blacklist. Other information such as home addresses and identity card numbers are also partially shown.

The launch of the app has not been without criticism with many raising privacy concerns over the app. A representative of the Hebei Higher People's Court said in a statement, "The development and application of the map can further realise the connection and sharing of information on debtors and create a social honesty framework that limits those who lose their credibility in many ways." In response Delia Lin, a senior lecturer in Chinese studies at the University of Melbourne, said, "This is dangerous — it encourages people to take the law into their own hands. The people who cannot pay their debt because they are too poor, then who will be subject to this kind surveillance and this kind of public shaming. Basically, society becomes a virtual prison — instead of going to jail, those people's personal lives, and even their children's personal lives, are being affected."

China has been developing a social credit score system since 2011 with the aim of separating the "trustworthy" from the "disobedient" with behavour ratings then used to determine access to services ranging from transport to loans. Since its launch more than 18 million people have been banned from flying and 5.5 million prevented from buying rail tickets as a result of their debts.

School Lunches Referred to Debt Collectors

Wednesday, January 30, 2019 - Posted by Michael McCulloch

A school district has allegedly hired a debt collection agency to recover lunch debts owed by parents.

In an article in Turnto10, it is being claimed that the Cranston Public Schools District located in Rhode Island, New England, are owed US$45,859 for unpaid lunches. It is being reported that parents have been notified that from January 2019 that debts owed on school lunches would be referred to a debt collection agency where the amount owed exceeded US$20.

School Chief Operating Officer, Raymond Votto, said in a statement to Turnto10, "In an effort to reduce our unpaid balance, the District has retained the services of a collection agency. The company is Transworld Systems and they will begin their collection efforts effective January 2, 2019". Mr Votto went on to claim that in the last 2 financial years the school district had lost US$9,508 from lunch debt. The move has been criticised by some and the impact this may have on struggling families where 43% of students are eligble for free or reduced lunches.

The Cranston Public Schools District isn't the 1st of its kind to refer these types of debts to debt collectors. In 2011 in Davidson County, North Carolina, policy dictated that lunch debts above US$37.50 be sent to collections while in 2012 an Ohio District sent US$900,000 in lunch debt to be recovered.

Lunches in the Cranston Public Schools District average US$2.50 per day for elementary school students and US$3.50 per day for middle and high school students.

West Gladstone Teen Fined Over Debt Collection Gone Bad

Thursday, September 27, 2018 - Posted by Michael McCulloch

A 19 year old teenager in West Gladstone QLD has recently discovered that causing damage to someone's property is not the correct way to recover a debt.

The teenager was attempting to recover an alleged $700 debt when he attended the address which saw him kicking a metal screen on the front door of the property before smashing a glass window and smashing a TV he found at the side of the house.

Acting Magistrate, Jason Schubert, fined the teenager a total of $1,100 and ordered him to pay $335 in compensation.

It's not the first time we have seen some Unusual Debt Collection Techniques such as those we outlined in our September 2016 issue of Debt Collection News.

Source: The Observer - September 2018