Government Departments Are ‘Worse Debt Collectors Than Private Companies’

January 12, 2016

A new report has claimed that government bodies often treat their debtors less well than private companies in the context of debt collection scenarios.

The claim is being made by Citizens Advice, which says it has seen a doubling in the number of people turning to its advisors for help with debt-related problems over the course of the past decade.

According to the charity, government departments now play a very considerable role in the lives of many thousands of indebted households around the UK and £1 in every £5 owed as debts nationwide is now believed to be owed to one or another government body.

Among the forms of government debt commonly cited as causing problems for families and individuals around the country are tax credit overpayments, benefit overpayments, magistrate court fines and council tax arrears.

Taking these areas as their main focus, Citizens Advice researchers have found what they describe as “evidence of poor practice, including a lack of consideration given to whether people can afford repayments and people forced to pay a debt when it is under dispute”.

Systems in place to process repayments in relation to tax credit overpayments came in for particularly strong criticism in the charity’s report, with these services cited as offering especially poor user experiences.

Part of the problem is said to be that establishing contact with an HMRC professional who can actually help an individual debtor clarify or resolve their issues in relation to tax credit debts is exceptionally difficult, Citizens Advice staff have suggested.

Setting an affordable repayment plan in place is also viewed by the charity’s staff as being considerably more difficult in the context of dealing with HMRC than with most private sector lenders or service providers such as utility or mobile phone companies.

“Of course people must repay government debts as soon as they can, but there is a difference between people who can’t pay and won’t pay,” said Gillian Guy, Citizens Advice chief executive.

“Our evidence shows glaring inconsistencies in how some government departments and private companies go about recovering money.

“It’s unacceptable that government agencies are behind the standards set for private companies when recovering debt.”

If you are finding it tough to fend off your creditors, whoever they might be, Scotland Debt Solutions can provide clear and impartial advice. Call one of our debt experts today to arrange a free consultation.