A new debt collection service has been launched by Barking & Dagenham Council. The Debt Collection service has been launched to reduce the need for enforcement action.
The new debt collection agency will be known as ‘Beacontree collections’ and will cater for council owed debts only. It started its new life on April 12th and it is hoped it will help drive up engagement and be more compassionate.
The council had previously relied on enforcement to collect unpaid council tax. The issues caused by strong arm tactics can often increase non payment as opposed to decrease it.
A lack of understanding from enforcement firms is one of the many reasons why the Council has opted to take greater control. The Debt Collection service created will work with debtors to manage repayment plans and suchlike.
The local authority says it has brought the service in house because it wants to move away from a standard “one size fits all” enforcement approach to bailiff services.
The council intends to offer a flexible approach to working with debtors who owe parking fees and owe unpaid council tax. Historically they have turned to no win no fee debt collection bailiffs.
The one size fits all mantra is normal within the no win no fee debt collection sector. It very often gets minimal success and can be costly in the long run. We broke a story last year on how purportedly ‘free’ debt collection was costing businesses too much in terms of reputation, hidden costs and liability.
Cllr Dominic Twomey, deputy leader and cabinet member for finance, performance and core services issued a statement saying “We know facing up to debt can be hard for some people, but it is always important to engage and work out a plan to solve your money issues.”
“Through Becontree collection service, we want to work with residents and help them pay off their debt in a more sympathetic way that works for everybody.
“Not clearing a debt can lead to further problems down the line, so I want to encourage anyone who receives a letter to engage and let us help you.”
The new Debt Collection service wants to move towards encouraging people to set up repayment plans where possible.
A key feature of the new service is that it will extend the initial period available for debtors to pay their debt.
Usually, an individual has seven days. Through Becontree collections service, they will have up to 28 days.
People will be contacted via a debt collection letter to let them know they have fallen behind in payments and for them to contact the service to arrange a way of settling the costs.
Early engagement with the service could prevent future enforcement fees, the council has said. If people are unable to pay the debt in full, extended payment plans could be put in place. The service will also direct people to other council services for assistance.
However, if anyone refuses to engage or comply with the service, then enforcement action may be taken. This could include the removal of property and assets to pay off the debts owing.
Other councils will no doubt monitor the success of this project with a keen eye. The use of Bailiffs to collect unpaid council debts often comes in for criticism for some bailiffs ‘heavy handed’ approach.
Some people have called for the use of Bailiffs to be withdrawn altogether. Bailiffs and enforcement officers are the preferred way to collect unpaid ccjs and are the choice of the majority of councils in the UK.