collection improvement program

Collection Improvement Program

Office of Court Administration

2

Texas Office of Court Administration

• State Agency• Created in 1977• Chief Justice - Texas Supreme

Court• Provides Administrative &

Technical Support• Serves Approximately 2,600

Courts in the State• (512) 463-1625

THE ISSUE

“Lack of compliance in paying court fines and fees denies a

jurisdiction revenue and, more important, calls into question the

authority and effectiveness of the court and the justice system.”

Five-Part Presentation

• The Concept of Change• Origins of the Collection Improvement Program• Collections Tools & Technology• Selecting A Vendor• The Real Issue

“In Order to Grow We Must Make A Conscious

Decision to CHANGE!”

“Change is often not easily embraced but is almost always

inevitable.” ATTITUDEATTITUDE KNOWLEDGEKNOWLEDGE TIMETIME HAM FACTORHAM FACTOR

Quotation Station

“You can't stop change from coming, you can only usher it in and work out the terms. If you're smart and a little lucky, you can make it your friend.”

-Barack Obama

Not everything that is faced can be changed, but nothing can be changed until it is faced.

-James Baldwin

Dallas County Collections Program

GENESIS

1992 Cases Receiving Payouts

Over 90 days11%

Within 90 Days38%

Warrant39%

No Warrant

12%

Findings• 51% of all money owed was

outstanding, either with a warrant or just uncollected.

• If the money wasn’t collected in the first 90 days, usually not collected!

Court Collections

• Current - 60 Days• 60 - 180 Days

• 180 Days plus

• 25 % Collected• 65 % Collected

(Warrant)• 10 % Collected

Private Sector Account Management

• Current - 30 Days • 31 - 60 Days• 61 - 120 Days• 120 Days Plus

• 85% Collected• 10% Collected• 3% Collected• 2% Collected -

Charge Off/Write Off

Proactive Proactive Enforcement Enforcement Plan and Plan and ProcedureProcedure

OCA’S VOLUNTARY PROGRAMS

• The Office of Court Administration (OCA) became involved in the search for a solution to this issue in the mid-1990s.

• By the end of the decade the agency had adopted a collections model based on the program used in Dallas County, which employs proactive, private sector techniques with great success.

2005 Senate Bill 1863Collection Improvement Programs (78)

• Counties 50,000 54• Cities 100,000 24• Half by 04/06• Half by 04/07

79th Legislature

Major Components

• Requires specific “in-house” management of current cases as outlined by OCA

• Requires strict management of delinquent cases which may include outsourcing

• Annual program reports

• Punitive measures for non-compliance

Collection Windows & Remedies

• Pre-Appearance• Appearance• Non-Compliance/Default• Pre-Capias Pro Fine• Post Capias Pro Fine

• Phone Calls• Notices

(letters/postcards)• Warrants• Amnesty Programs• Warrant Round Ups• Non-renewal of DL• Denial of Vehicle Reg.• Civil Remedies

Collection Tools

Courtesy Cards

Applications

Interviews

Warning Calls

Warning Cards

Warrant Calls

Collection ToolsStatutory

• DL Suspension• Vehicle Registration Denial• Recreational License Suspension• Professional License Suspension• Wage Attachment• Commissary Account Attachment• Tax Refund Intercept

Collection ToolsInternet Services

• usps.com• whitepages.com• accurint.com• masterfiles.com• nstn.net• publicdata.com• zabasearch.com• phonevalidator.com• freetranslator.com

Phone Evolution

Electronic PaymentVoice Mail

Predictive Dialing

Contact

Up Date Records

Progressive Dialing

Scheduler

Consumer makes contact •On line•By phone•In person•Store Front

Vendor’s System

Posts to Customer File

Recap Report-Next Business Day via

Fax

E-mail

Web Reporter

Direct Deposit to bank or ACH On site printed funds check

Validation System

Payment InnovationsCredit Cards , Kiosk, Electronic Transfer, Remote

Payment is received and transmitted electronically

• Discovery• Strategy

• Implementation• Evaluation

• Find out where you really are.• Develop a plan to put you where

you want to (should) be.• Just Do It! • Don’t be afraid to make changes.

Action Plan

Establishing Local NeedThree Questions

• How much is uncollected?

• How do collections compare with assessments?

• Do WE have a problem or an opportunity?

Establishing Local NeedFollow the Money

• Finance Office• Budget Office• Auditor’s Office• Court Administration• Financial Records

Enforcement Model

• Staff or staff time dedicated to collection activities.

• Expectation that all court costs, fees, and fines are generally due at the time of sentencing or pleading.

• In most cases, defendants unable to pay in full on the day of sentencing or pleading are required to complete an application for extension of time to pay.

• Application information is verified and evaluated to establish an appropriate payment plan for the defendant.

“Key Elements”

Enforcement Model

• Payment terms are usually strict (e.g., 50% of the total amount due must be paid within 48 hours; 80% within 30 days; and 100% within 60 days).

• Alternative enforcement options (e.g., community service) are available for those who do not qualify for a payment plan.

• Defendants are closely monitored for compliance, and action is taken promptly for non-compliance. Actions include telephone contact, letter notification, and possible issuance of warrant.

“Key Elements”

Enforcement Model

• A county or city may contract with a private attorney or a public or private vendor for the provision of collection services on delinquent cases (61+ days), after in-house collection efforts are exhausted.

• Application of statutorily permitted collection remedies, such as programs for non-renewal of driver’s license or vehicle registration.

• Issuance and service of warrants, as appropriate.

“Key Elements”

Three C’s of Enforcement

• Control – Required to manage.

• Contact - Required to connect.

• Consistency – Required to conclude.

Outsourcing As A Tool

$100,000 (65-90%)

60,000 (60%)

- 6,000 (Less Cost)

+12,000 (30% of $40K Uncollected)

$ 66,000 (Net Revenue)

IT WORKS BETTER TOGETHER

IN-HOUSE OUTSOURCE IN-HOUSE+

OUTSOURCE

$54,000 $30,000 $66,000

Selecting A VendorInitiating the Process

• Always begin with a Request for Information (RFI).

• Use the information from the RFI to create a Request for Proposal (RFP).

• Use both to narrow the list of Candidates.

Selecting A Vendor

Vetting Process

• Well Documented Industry Credentials

• Valid Licensing in All States

• Specific Case Expertise & Work Plan

• Background Checks & Staff Training

Selecting A Vendor

Vetting Process •Existing & Prior Client List/References

• Require In-Person Finalist Presentations

• Visit the Selected Vendor’s Facility

Selecting A Vendor

Research Complaints & Legal Actions

»- Better Business Bureau»- www.RipOffReport.com »- www.Complaints.com»- www.Google.com

Selecting A Vendor Contracts

• Write Your Own “Customized” to Fit Your Needs.

• Payments to Court, to Agency or to BOTH…-Capabilities & Methods Supported

* Credit & Debit Cards* Cash, Checks & Money Orders* Western Union, MoneyGram & Others* Online, Phone, Mail & In-Person

• Remittance Procedures - Frequency & Methodology (ACH or Check)

Selecting A Vendor

Other Considerations

• Skip Tracing Processes & Procedures• Recording & Archiving of Calls• Insurance Coverage & Surety Bonds• IT Capacity & Internal Infrastructure• Online Access to Reports & Case Data• Business Continuity/Disaster Recovery Plans

Selecting A Vendor

Emerging Industry Trends

• Selling Obligations to Private Sector Firms• Using Primary & Secondary Vendors • Incentives for Guaranteed Returns.• Penalties for Failure to Meet Target

Recovery Rates.

Common Plan Issues

• Uniform Collection Policy• Program/Project Supervision & Management• Targets & Goals• Participation• Staff selection, criteria, qualifications• Functional Logistics- physical location(s),

furniture, equipment, forms, supplies, etc.• Funding and/or Budget Issues

Keys to Success

• Judicial Understanding & Commitment• Simplicity (kiss)• Internal Communication & Cooperation• Quality Staffing• Investment in & Efficient Use of Technology

Jim Lehman

Office of Court Administration

205 West 14th Street, Suite 600

Austin, Texas 78701

(512) 936-0991

jim.lehman@courts.state.tx.us

Russ Duncan

Compliance/Collections Specialist

FLCCOC–2541-1 Barrington Circle

Tallahassee, Florida 32308

(352) 503-7490

rduncan34@tampabay.rr.com