Regulator criticised over debt collection process

Regulator criticised over debt collection process

The ATO has copped criticism from a union official for requesting expressions of interest (EOIs) from private debt collection agencies.

The ATO recently requested EOIs, seeking responses from debt collection specialists, according to the Australian government’s online tender system.

“The supply of debt management services forms part of a wider approach to the management of Commonwealth debts,” the tender stated.

“This request for EOI is not looking to limit such services to the provision of collecting current outstanding debts but extends to the provision of alternative collection strategies; strategies aimed at preventing future debt; additional strategies; and delivery of services at the national level.”

Since the tender was issued, Australian Services Union official Jeff Lapidos has criticised the ATO’s approach to debt collection.

"You'd think after 100 years the Tax Office would know how to collect money it was owed,” he said, according to Fairfax reports.

Mr Lapidos expressed concern that private companies would not be covered by the Australian Public Service (APS) Commission’s code of conduct.

"Private debt collectors… can ring people up in the middle of the night and attempt to pressure them.”

An ATO spokesperson told SMSF Adviser the referral of debts to agencies has become “an integral part of our debt collection strategies and complements internal debt collection activities”.

Also, despite the ATO having announced that the value of collectable debt at the end of June 2014 was almost $19.5 billion, an increase of 10 per cent compared with the end of June 2013, it said the request for tender was not linked to this increase.

Regulator criticised over debt collection process
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