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Lessons to Learn from the NSW State Governments Debt Collection

Friday, April 01, 2011 - Posted by Philip Harvey

The new NSW Government revealed that the state was owed over $1 Billion in unpaid fines. State Finance Minister Greg Pearce was highly critical of the Office of State Revenue for failing to enforce the payment of penalties.

The State Debt Recovery office details the enforcement process on their website which can be found here.

What debt collection lessons can we all take from this?

Looking at the recovery process we believe the State Debt Recovery Office (SDRO) processes are falling over once RTA restrictions have been imposed. Should you note pay your parking fine / infringement notice, upon expiration of an Enforcement Order, the SDRO will suspend your license, cancel your registration and impose customer restrictions on your account. Most people pay their fines before this point. Those that do not drive on our roads unlicensed and unregistered (an insurance liability nightmare itself).

The Other sanctions after the RTA restrictions have been imposed allow for a Property Seizure Order, Garnishee Order, Examination Summons and Charge on Land.

If a debtor has the capacity to pay, these Other Sanctions will gain payment if used effectively. It is our opinion that this is where SDRO is falling over. The reasons for this could be:
  • Insufficient staff to pursue these avenues
  • Lack of knowledge on how to use these collection tools
  • Not prepared to spend any money to use these collection tools.

There are many ways to correct these reasons including training, employing more staff or outsourcing.

In this SDRO instance, the minister has indicated they will look at outsourcing this to specialist debt collection agencies.

Key Points for your organisation:
  • Examine your arrears portfolio
  • Identify non-paying sections of your portfolio
  • Look at available enforcement options
  • Review the resources available to your organisation to effectively enforce your debts.

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