If utility shut-off is an option, why would a municipal utility need to contract with a collection agency? The RFP process is a helpful way to determine what fee amounts are appropriate in different debt-collection categories. Collection agency fees should be set at an amount that reasonably compensates the agency for its services. While a 50% contingency fee may be appropriate for a $200 utility debt, it may be more than needed for other types of larger debts. ![]() Debts to municipalities vary widely by type and amount. If a contingent fee of 50% on the first $100,000 of unpaid debt is reasonable under the statute, is there any reason to negotiate a lower fee with the collection agency? Yes, there is a service category for collection agencies on MRSC Rosters. Any contract should be authorized by the entity’s governing body or follow the entity’s contract approval procedures.Ĭan a local government entity contract with a collection agency through MRSC Rosters? We have examples of collection agency RFPs from the City of Olympia and the City of Kirkland on our website. Even so, using a request for proposal (RFP) process can help identify the most qualified collection agency. Most types of local government entities are not required to use a specific contracting process for services, but check out our Find Your Contracting Requirements webpage to be sure. What type of process is required under state law to contract with a collection agency? Frequently Asked Questions about Collection Agencies It is also a good practice for the government entity to advise the debtor that additional collection fees will become due upon assignment of the debt to collections. Wait at least 30 days from the time notice was attempted before assigning the debt to collection.Attempt to advise the debtor of the existence of the debt and that the debt may be assigned to a collection agency for collection if the debt is not paid and.Under RCW 19.16.500(2) the government entity must: There are important requirements that a government entity must meet prior to assigning a debt to a collection agency. Any fee agreement entered into by a governmental agency is presumptively reasonable (which places the burden on the debtor to establish that the agreement is unreasonable).A minimum fee of the full amount of the debt of up to $100 per account is reasonable and. ![]()
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