An Ambulance trust has had to write of £339k after they were deemed unrecoverable. In a meeting of the West Midlands Ambulance trust board (WMAS), members agreed to write off a whopping £339,000 owed to the service detailed in a report following debt recovery failures.
As reported in the Shropshire star, TNC Debt Collection Agency had provided a no win no fee debt collection service to the Ambulance trust. It was stated that TNC recovered no debts at all in recent years. As a result, this prompted the trusts decision to bring all debt recovery activities in-house from now on.
As part of the move to write off the “unrecoverable” debt, the trust has also agreed to have its own staff deliver debt collection services, rather than a using a debt recovery agency.
Karen Rutter, Interim Director of Finance at the trust is reported in the Shropshire Star to have said: “Going forward debt collection is being undertaken in house.”
The board was told that it is good practice to write off unrecoverable debts, so that they do not inflate the value of the trust’s assets.
A report said: “There are a number of aged balances included in the receivables (debtors) balances. It is good practice to review these balances regularly and assess the likelihood of settlement.
“Any balances deemed to be irrecoverable should be written off so as not to inflate the trust’s asset value.”
The report also detailed the Trust’s plans to take over debt collection services and bring them internally.
It said: “The trust has previously engaged TNC who are a debt recovery agency.
“These types of arrangements are usually provided on the basis of a commission charged against the amount recovered. TNC has had limited success with WMAS debts and no recovery has been made in recent years.
“To ensure that prompt follow up and recovery processes are undertaken, a member of the existing debtors staff is being trained to undertake the debt recovery responsibilities.”
Tony from Debt Collection comparison site best4debtcollection.co.uk commented “This is an example where the benefits of using a debt collection agency should not be based upon the results of one service”
“It is the equivalent of working with a incompetent builder then assuming they’re all the same. I am sure at some point the Trust will review their decision and then choose to work with a more competent debt collection service”
“Very often, Companies choose no win no fee as they feel they have nothing to lose. Well in this case the Trust may well have lost £339,000”