Councils and debt collection – wrong if they do, and wrong if they don’t...

Two current stories attracting national headlines have stopped us in our tracks, because they seemed to be suggesting that public sector organisations were being too efficient in collecting money that is owed to them.

The first reported that local councils had used bailiffs 1.8million times to collect debts on their behalf, while the second said that ten per cent of all prosecutions involve people who had not paid their TV licence.

Of course the heart of both stories was about the use of excessive force.   Shouldn’t councils be using a range of other debt collection methods before they resort to sending in bailiffs? Should so much expensive court time be taken up with chasing TV licence non-payers?

We wrote recently here about the wide misunderstanding of what bailiffs can and cannot do.  We agree – and hear every week from clients - that some councils do call them out too quickly, and that many bailiffs (and debt collection agents) overstate their powers and use tactics which are intimidating and downright frightening.

The reported number of uses of bailiffs by councils in the last 12 months is high – 1.8million is a big number.  But what does it actually represent? 

How many were for what most of us would recognise as a case of “last resort” and how many were called in after just two or three months of arrears?  What efforts had been made to collect the debt before the bailiffs were involved?

Are the councils responding to an increase in serious arrears, or simply to a reduction in Government funding?

Some more questions. Why are these governmental organisations struggling to collect the money owed to them?  Shouldn’t that always have been a huge priority?  Why have they been brushing these debts under the carpet in the past – and why have so many councils now apparently simply pushed the problem out to firms of bailiffs, without putting in place sufficient quality checks and balances?

We also have to ask the question that we face with clients on a daily basis – why don’t more of us understand about priority debts?  Why don’t we all know that if we don’t pay our council tax (the clue is in the word Tax, people) there are very serious consequences? 

Why weren’t we taught at an early age that there’s a big difference between not paying the bills that come from governmental organisations, and not paying off an unsecured loan?

All of this represents a wake-up call on several fronts.

We all need to take our debts – the money we owe and, for some organisations, the money owed to us – much more seriously.

And we must teach children in the classroom how to differentiate between priority debts – for the things they must pay for – and secondary debts – for the things they want to pay for – from a very early age.