Third Party Court Collection

11/03/2015
By Michael Grohs, Contributing Editor

During the Great Recession, courts, facing budget cuts and personnel shortages, saw an increase in using third party sources to collect fines and fees. Court collection is a complex and complicated beast. There is not only the matter of compliance; there is also the matter of legal restrictions, chasing down those who don’t pay, convenience on the payer’s part, etc.
 
Don McKinley, owner and founder of National Courts, Collecting, and Consulting (N3CS), notes that collections can become the “forgotten stepchild” until it is budget time. McKinley has dedicated decades of his career to doing “anything to help courts advance.” As noted on his website (www.n3cs.com), there is an estimated $100 billion dollars in government and criminal debt that is being scrutinized by officials at every level of government.  Courts are often criticized for not effectively collecting these debts, and they are also criticized for allegedly levying and collecting criminal court costs, fees, and fines from those least able to pay it. (The first National American Court Collection Conference took place from October 19-21, 2015 to discuss such matters.) Budgets are stretched, personnel are down, and the fact is, many agree, courts need help. That help can come from third parties such as consulting organizations such as N3CS, other government agencies, and technology and service providers such as RevQ and nCourt.
 
Factors to Consider
There are several things to consider when debating involving a third party. Nial Raaen, principal consultant at the National Center for State Courts (NCSC) points out that during the recession there was a lot of interest in third party services, but since then the trend has tapered off a bit. (There is not much data on whether courts are using it more or less.) He furthers that there are avenues that can complicate matters. Legally some states can pass a collection fee onto an offender, and some states cannot, so that will have an impact on utilizing third-party services. There is also, says Steve Ard, chief operating officer at RevQ, the matter that “it can be very difficult for courts to procure services due to the complexities of the procurement process and the compliance requirements that surround the collection of debt.” Raaen suggests that courts examine some considerations. Who’s going to bear the costs? What will be the metric of success? What services are being offered?

The primary consideration, says McKinley, is that jurisdictions not consider courts to be revenue generating sources. That’s where entities can get into trouble, and once that path is taken, it can become a slippery slope. He points out the Department of Justice’s Report on Ferguson, Mo., which “did not have a good collections process.” The system relied on courts to generate revenue rather than for enforcement and complicity. Simply put, if they wrote more tickets, they would have more money. (Since then, the judge and clerk in Ferguson have resigned.) He stresses that there is indeed a positive role for outside vendors, but courts must be mindful and pay attention to what those vendors are doing. It is not just a matter of courts turning over the responsibility to an outside organization. The court still has the overall responsibility and jurisdiction in the case. “It’s a matter of compliance.”
 
Policy in Place?
One problematic policy addressed at the conference, says McKinley, is that courts do not have their policies in writing. If policies are handed down orally, the problem starts there. Steps A through Z should be in writing. Courts should ask themselves: How complete are they? How up-to-date are they? If they are not defined completely, they are open to interpretation, or worse, misinterpretation. It should be, says McKinley, if someone comes in off the street, they should be able to understand the policy, and those policies should be reviewed every year or two.

He also advises that small steps such as referring to those who owe money as “customers” rather than “defendants” can have an impact. “Once we label someone, it tends to make us look down our noses at them, even if it’s inadvertently.” His goal, he says, is to get customers out of the system as soon as possible. “If I get out of bed and help someone be more successful than they were before they met me, it was a good day.” He furthers, “It’s never about the money. It’s about compliance. If you focus on the compliance, the revenue will take care of itself.”
 
Another Option: Other State Agencies
Another third party option for courts to use is other state programs, which, says Ard, “act as an agency within the state for courts’ collection needs.” California uses the Franchise Tax Board, which in other states is known as the Department of Revenue. Says Raaen, the Department of Treasury can provide tax intercept services for state taxes, but that issue is moot for states such as Florida and Texas that do not have state income taxes.
 
Steve Ard and Jon Daane of RevQ note that, “Initially (over the last 20 years) collections were handled in-house. Over time it became a mix of in-house and outsourcing.  This evolved into more outsourcing with an emphasis on managing the agencies and accounts being forwarded. Now we see a lot of hybrid models where the courts will take the initial steps in collecting on accounts, then based on strategies they have in place will outsource some or all as well.” RevQ, they say, is in a unique position having worked with government agencies, particularly courts, for over 20 years. The company provides not just technology but full solutions to improve in-house collections, the ability to outsource and manage effectively, and integrate with the “bigger picture” programs within the states. Other services are consulting to increase revenue, reduce management and improve management. Finally, their services include client care, custom development, and training. 

RevQ’s collection product is Revenue Results, which can be used in numerous arenas by any government agency. Revenue Results allows governments of any size to collect delinquent revenue more efficiently and more effectively. It is designed to automate as many debt collection tasks as possible, which in turn minimizes user time doing manual tasks on each account. Those features include generating automated work lists, automated work flow, automated correspondence, payment plans, reporting, forwarding to outside collection agencies, and more. Those functions allow courts to electronically or manually input cases and accounts with automatic linking of multiple debts to a debtor; automatically import account transactions, cases and data from other systems; query accounts, store and use case-specific data, keep track of additional contacts or aliases; view collection activity notes; and customize user screens for specific needs. Daane notes, “The most successful clients use all of the tools.”

There is another stage of debt collection aside the overworked courts and chasing down delinquent debt. There is also the matter of those who just want to pay their fine and, as McKinley says, “Get out of the system.” For years the only two options for paying fines and other fees were either in person at the courthouse or by mail. Courts have been adopting the use of technology in every arena, so naturally collections is among them. Software is a primary component to advancing payment methods for payer and payee. One of those providers is Kennesaw, Ga.-based nCourt. Tony Clancy, chief executive officer, states that the company’s services are offered in 1,600 courts around the nation (as well as hundreds of other government customers). He furthers that the issues are uniform in almost all of them: there is too much work and not enough people, and the desire to make collections more accessible is everywhere. He points out one consideration that those involved in collections have to constantly keep in mind, and that is the possibility of error could mean someone ending up in jail or losing his or her driver’s license. “The people who do it well have to be perfect.”
 
What nCourt offers is the ability to allow “citizens to satisfy their obligations over the Internet, on their smart phone or tablet, or over the phone.” Payers visit a customized website that the company builds for the court. After entering identifying information, the payer reads and accepts the terms. Payers view payment amounts, agree to a convenience fee, and then pay with a credit card. They will then receive an email confirmation of payment. On the court’s end, a clerk receives instant notification when a payment has been made. They use a customized online system to approve or deny payment with additional options for transferring to a different jurisdiction or to mark the payment as pending. Clerks use a payment dashboard to run reports or gain additional details on transactions. In cases where nCourt integrates with a court’s system, the clerk does not need to review or approve. This all occurs in real time. The service comes at no cost to the court. The citizen pays a convenience fee in order to avoid annoyances such as taking time off work, travel and parking; however, the service does allow “customers to absorb this cost if they wish, buffering citizens from any additional fees.” Courts also receive daily reports. Brian Cochran, senior marketing manager at nCourt furthers that there is also a drive toward text reminders and he sees this in the very near future.

 

    Request More Information

    Required = *