News & Resources

Town officials seek help from debt collectors

Mar 28, 2012 Mike Garretson

A debt collection firm has been dispatched hired to help the town of Smithfield, North Carolina in the recovery of utility debts, The Herald reported. The news source explained that there are approximately 500 overdue utility accounts in Smithfield, and by working with collectors, the town will make a profit due to TekCollect's policy of charging overdue customers fees. Town manager Richard Hicks supported the recovery efforts, he explained to The Herald, because the frequency of overdue utility accounts was on the rise in part due to many rental properties as well as a sizable transient population. Though in the past town officials themselves would attempt to recover debts, Hicks told the source, they recently decided to seek professional help after TekCollect owner Mark Graff asserted to the council that the firm could recover over 50 percent of the lost funds. Other towns or cities with high instances of debt may want to follow Smithfield's lead, as overdue bills are somewhat common in nearly every community. Collection practices can save money for citizens not in debt. A 2012 Ernst & Young report found that returned debts dissuade businesses from raising their prices to account for loss, saving American households approximately $396 annually.