The city of Saluda, N.C. has joined the growing ranks of local governments looking at either hiring a new collection agency or contracting with one for the first time.
Saluda previously employed an agency that went out of business. This month, city officials heard from Craig Halford with agency Transworld Systems to hear about a possible collaboration.
Transworld Systems would charge $14 per account to make five attempts to contact Saluda’s past due customers - including three written reminders and two automated phone calls that occur in either five, seven or 10 days. The final contact gives the customer 10 days to pay or set up a payment plan or they will be turned over to a debt collector, according to Halford.
Transworld Systems acts on behalf of the city, meaning the calls and letters come from the city. The company offers customers options to pay as well as an envelope so they can pay directly to Saluda.
If either a payment or an arrangement to pay is not made in the first five contacts, the city has the option to take it to the next level. The company will then make contacts in their name, as a debt collector.
If after the cycle of the collection agency there is no response, Halford said the account is then turned over to attorneys. Saluda pays nothing past the first two stages unless the account is collected. If it’s collected at the last court phase, the company keeps 50 percent and the city keeps 50 percent.
The city recently had an estimated $23,000 in past due utility bills and charged-off bills that it could no longer collect. City commissioners did not decide whether to hire the company during the meeting. The council meets again on June 10.