Under the Debt Collection Improvement Act of 1996, the Department of the Treasury is required to maintain a schedule of private collection agencies (PCAs) or private sector companies having expertise in the area of debt collection, to assist the government in its debt collection efforts. As part of Cross-Servicing, the Treasury Department attempts to collect delinquent debt through several means, including demand letters, telephone calls, the Treasury Offset Program (TOP), Administrative Wage Garnishment, and credit bureau reporting. Once the Treasury has exhausted efforts to collect the debts internally, the debts are sent to the PCAs for collection activity. The activities of the PCAs are monitored by the personnel of the Private Collection Branch (PCB) of the Debt Services Division of Debt Management Services.
What is a private collection agency?
A private collection agency (PCA) is a private sector company specializing in the collection of delinquent debt. A PCA will attempt to find and contact a debtor by searching various databases, making telephone calls and sending collection letters. Once the debtor is located and contacted, the PCA will encourage the debtor to satisfy the debt. Recently, Administrative Wage Garnishment has been added to the list of debt collection tools available to the PCAs.
DMS closes out private collection agencies under previous contract.
As of January 31, 2003, Debt Management Services performed the operational close-out of seven agencies from the 1997-2001 debt collection contract. Private collection service was ended with the following contractors:
Aman Collection Service, Inc.
GC Services Limited Partnership
National Asset Management
Nationwide Credit, Inc.
NCO Financial Systems, Inc.
OSI Collection Services
Van Ru Credit Corporation
The existing debts maintained by these contractors were returned to the Treasury and referred to Cross-Servicing. Four contractors still remain in operation from the previous contract. Allied Interstate, Inc., Diversified Collection Services, Inc., and Linebarger, Goggan, Blair & Sampson, LLP continue to work accounts under the previous contract and work on the current contract as well. Unger and Associates, Inc. remains open at the present time, but its operations will be phased out in upcoming months.
DMS awards new private collection agency contracts.
On October 1, 2001, Debt Management Services awarded five new Treasury debt collection contracts to enlist the services of private collection agency contractors. These contracts were awarded in order to increase the recovery of non-tax federal debts, and to resolve non-tax federal receivables by collection or write-off. The new contracts are one-year contracts with four one-year options available. The following contractors were awarded a Treasury debt collection contract to provide delinquent debt collection services:
Allied Interstate, Inc.
P.O. Box 674689
Marietta, GA 30006
Phone (888) 470-7417
Diversified Collection Services, Inc.
P.O. Box 2018
Castro Valley, CA 94546-0018
Phone (888) 310-2006
Ocwen Federal Bank
P.O. Box 780549
Orlando, FL 32878-0549
Phone (888) 778-2696
Pioneer Credit Recovery, Inc.
P.O. Box 189
Arcade, NY 14009
Phone (877) 907-1820
Private Collection Agency Performance.
These five collection agencies continue to provide valuable services to DMS. From March 1998 to February 2003, the PCAs have collected over $136 million in delinquent, non-tax debt for the government. In Calendar Year 2002, the PCAs collected nearly $52 million for the government. With federal agencies referring more debts to Treasury's Cross-Servicing Program, DMS expects collections will continue to rise in upcoming years.
Contacting the PCA’s.
Each PCA may be contacted at the address or phone number shown above by anyone with questions concerning a debt or their services.
How are these agencies regulated?
The collection efforts of the PCAs are governed by various federal and state laws, including, but not limited to, the Fair Debt Collection Practices Act, the Federal Debt Collection Procedures Act, and the Privacy Act. Collection agency employees are trained to comply with the terms of the Fair Debt Collection Practices Act that governs collection practices of the PCAs. Under the Treasury’s contract with the PCA’s, there are numerous controls to ensure that debtors are treated fairly. The Private Collection Branch of FMS closely monitors the activities of the PCAs on a daily basis. When PCB is notified in writing of any debt dispute or a complaint concerning the PCA, the evidence is reviewed, documentation is gathered, and action is taken to correct the situation if necessary. In addition, PCB personnel conduct on site Compliance Reviews of each PCA on a rotational basis, to ensure that all aspects of the Treasury’s contract are being adhered to by the PCAs.
