Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
John T. Matthias and Laura Klaversma National Center for State Courts Court Consulting Services
Copyright © 2009 by the National Center for State Courts ISBN 0-89656-274-3
Table of Contents ACKNOWLEDGMENTS…………………………………………………………………………………………………………………………………
i
INTRODUCTION ……………………………………………………………………………………………………………………………………..
1
Chapter 1
COURT COLLECTIONS OVERVIEW…………………………………………………………………………………
3
1.1
Why Should Courts Improve Collections?..............................................................................................
3
1.2
The Importance of Courts Earning Defendants’ Compliance……………………………………………………………..
4
1.3
Examples of Statewide Initiatives: The Role of State Judicial Leadership………………………………………….
6
1.4
Local Judicial Leadership in Improving Collections……………………………………………………………………………
11
1.5
Attributes of a Successful Collections Environment………………………………………………………………………….
12
1.6
Core Principles………………………………………………………………………………………………………………………………...
14
1.7
Designing a Court Collection Program……………………………………………………………………………………………...
15
1.8
Programs Combining Internal and External Resources……………………………………………………………………..
18
Chapter 2
COLLECTION BEST PRACTICES………………………………….....................................................
20
2.1
Create Payment Expectations through the Fine Collection Atmosphere…………………………………………..
20
2.2
Practice Leadership and Commitment……………………………………………………………………………………………..
21
2.3
Set Collection and Information Goals……………………………………………………………………………………………….
22
2.4
Use a Systematic Communication Plan with Defendants………………………………………………………………….
23
2.5
Establish Follow-up Processes………………………………………………………………………………………………………….
24
2.6
Consider Forming a Specialized Collection Unit………………………………………………………………………………..
26
2.7
Provide Education and Training……………………………………………………………………………………………………….
27
2.8
Establish Accountability: Control the Collection Inventory……………………………………………………………….
28
2.9
Consider the Cost of Collections………………………………………………………………….…………………………………..
30
2.10 Pursue Interagency/Inter-jurisdictional Cooperation……………………………………………………………………….
32
METHODS OF PAYMENT AND COMPLIANCE ENFORCEMENT…………………………………
35
3.1
Prepayment of Fines/Payment by Mail……………………………………………………………………………………………
35
3.2
In-Person Payments……………………………………………………………………………………………………………………….
36
3.3
Acceptance of Personal Checks………………………………………………………………………………………………………
37
3.4
Payment by Credit Card…………………………………………………………………………………………………………………..
38
3.5
Acceptance of Payments Remotely………………………………………………………………………………………………….
39
3.6
Partial-Payment, Installment, and Deferred-Payment Plans…………………………………………………………….
41
PAYMENT ALTERNATIVES AND CAPACITY TO PAY ……………………………………………...
42
Chapter 3
Chapter 4 4.1
Community Service in Lieu of Fine Payment……………………………………………………………………………………
42
4.2
Time Served in Lieu of Fine Payment……………………………………………………………………………………………...
43
4.3
Traffic School…………………………………………………………………………………………………………………………………..
44
4.4
Assistance in Finding Jobs……………………………………………………………………………………………………………...
44
4.5
Financial Counseling………………………………………………………………………………………………………………………..
44
Chapter 5
ROUTINE ENFORCEMENT TECHNIQUES………………………………………………………………………..
45
5.1
Notice Before Initial Appearance……………………………………………………………………………………………………..
45
5.2
Actions Upon Nonpayment……………………………………………………………………………………………………………..
46
5.3
Late Fees on Fines and Costs……………………………………………………………………………………………………………
47
5.4
Use of Credit Information Services…………………………………………………………………………………………………..
47
Chapter 6
IN-HOUSE COLLECTION UNIT………………………………………………………………………………………..
49
6.1
Organizational Considerations of In-house Collection Unit………………………………………………………………..
49
6.2
Organization of the Collection Unit’s Work……………………………………………………………………………………….
50
6.3
Screening Eligibility for Payment Plan: Collection Investigation………………………………………………………...
60
6.4
Staffing Considerations: Using Existing or Additional Staff………………………………………………………………...
61
6.5
A Collector’s Professional Demeanor…………………………………………………………………………………………………
62
Chapter 7
CONTRACTING COLLECTION SERVICES…………………………………………………………………………..
64
7.1
Role of Outsourcing Collection Services in Court Collections……………………………………………………………
64
7.2
Collection Services Considerations…………………………………………………………………………………………………….
66
7.3
Requests for Proposals for Collection Services…………………………………………………………………………………..
66
7.4
Communications with External Collection Agencies…………………………………………………………………………..
68
Chapter 8
MORE-COERCIVE ENFORCEMENT MEASURES……………………………………………………………...
70
8.1
Collection of Fines as a Civil Judgment – Garnishment and Liens……………………………………………………….
70
8.2
Income Tax Refund Intercepts (“Tax Setoff Program”)………………………………………………………………………
71
8.3
Arrest Warrants and Incarceration…………………………………………………………………………………………………….
71
Chapter 9
PROBATION/PAROLE DEPARTMENT COLLECTION ACTIVITIES………………………………………..
73
9.1
Pre-sentence Investigations………………………………………………………………………………………………………………
73
9.2
Fine Payment as a Condition of Probation or Parole………………………………………………………………………….
74
9.3
Payment from Inmate Commissary Accounts…………………………………………………………………………………….
74
Chapter 10
USE OF TECHNOLOGY IN COLLECTIONS………………………………………………………………………….
76
10.1 Building Business Capabilities Using Technology……………………………………………………………………………...
76
10.2 Software…………………………………………………………………………………………………………………………………………..
77
10.3 Software System Interfaces……………………………………………………………………………………………………………...
79
10.4 Data Warehouse……………………………………………………………………………………………………………………………….
81
10.5 Autodialers and Predictive Dialers…………………………………………………………………………………………………...
82
10.6 Skip-Tracing Services………………………………………………………………………………………………………………………..
84
Chapter 11
OPERATIONAL INFORMATION AND PERFORMANCE MEASURES………………………………….
86
11.1 Obtaining Defendant Information for Collection Purposes………………………………………………………………..
86
11.2 Policy Issues Related to Caseflow Management Information…………………………………………………………….
87
11.3 CourTools Performance Measure 7…………………………………………………………………………………………………...
87
Chapter 12
OTHER ISSUES RELATED TO COURT COLLECTIONS…………………………………………………………
93
12.1 Legislative Issues……………………………………………………………………………………………………………………………..
93
12.2 Cost Recovery of Indigent Defense…………………………………………………………………………………………………..
94
12.3 Centralized Traffic and Government Collection Units……………………………………………………………………...
95
12.4 Fine Amnesty…………………………………………………………………………………………………………………………………..
95
Chapter 13
SAMPLE COLLECTION STRATEGIES………………………………………………………………………………..
96
13.1 Sample Program 1: Payment-on-Day-of-Sentencing Program………………………………………………………….
96
13.2 Sample Program 2: Reducing a Backlog of Accounts Receivable..……………………………………………………
97
CONCLUSION...........................................................................................................................................
99
List of Tables Table 1:
Texas Collection Improvement Program Key Elements……………………...………………………………….
7
Table 2:
Arizona Fines/Fees and Restitution Enhancement Program Services….…………………………………..
8
Table 3:
Michigan’s Tools for Collecting Fines and Fees……………...……………………………………………………….
9
Table 4:
California Comprehensive Collection Program Criteria……………………………………………………………
10
Table 5:
Three Court Collections Models……………………………....................................................................
15
Table 6:
Activities by Collections Phase………………………………………….…………………………………………………...
17
Table 7:
Best Practices and Local Practices Checklist………………………….………………………………………………..
33
Table 8:
Components of Texas Collection Improvement Program………………………………………………………..
50
Table 9:
Business Capabilities and Technology Tools…………………………………………………………………………..
76
Table 10:
Defendant/Account Information for Management of Collections……….………………………………...
77
Table 11:
Collection-Related Software Functions…………………………………………………………………………………..
78
Table 12:
Case Management System Interfaces for Court Collections…………….…………………………………….
80
Table 13:
Performance Measure Definitions………………………………………………………………………………………...
89
List of Figures Figure 1:
Proportions of Resources Needed to Collect and Willingness to Comply………………………………..
18
Figure 2:
CourTools Measure 7 Reporting Period Example……………………………………………………………………..
88
Court collections programs should be designed with several goals in mind: To hold defendants accountable for their actions To improve the enforcement of court judgments To reduce judicial and clerical efforts required to collect court-ordered financial obligations To ensure prompt disbursement of court collections to receiving agencies and individuals To achieve timely case processing Michigan Trial Court Collections Standards & Guidelines, July 2007
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
ACKNOWLEDGMENTS The first edition of Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions emerged after the Court Consulting Services of the National Center for State Courts offered technical assistance to the state court administrators of all 50 states regarding collection of fines and fees in 1993 and 1994. The response from courts was overwhelming. Project staff visited 40 courts in 22 states to review collection procedures and make suggestions for improvement. Practically every type of limited and general jurisdiction trial court was represented, including three statewide systems. The issues presented and the procedures used covered the spectrum of collections problems and practices in America’s courts. The 1995 publication, Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Issues and Solutions, has been used by many state judiciaries and state courts for the past fourteen years. With the passing of time, and particularly with the increasing use of technology, the National Center for State Courts determined that it was important to review and update the publication. Court Consulting Services researched states and courts to assess collection efforts, programs, and techniques. Project staff attended state and national conferences held by the Governmental Collectors Association of Texas, Inc.1 A national work group convened in October 2008 to gather additional information and discuss various aspects of collection programs. This report could not have been prepared without the open and forthright assistance of every court visited in 1993 and 1994 as well as the input of the many states, courts, and individuals during the research period of 2007 to 2009. The project staff wishes to express particular appreciation for those involved in the 2008 national work group and other writers who contributed to this edition, who include the following: Beth Barber, Trial Court Collections Project Manager State Court Administrative Office, Michigan Supreme Court Michael A. DiMarco, Consolidated Collections Manager Arizona Supreme Court
1
The Governmental Collectors Associations of Texas is a nonprofit association that recognizes, supports, and serves governmental collection programs in the state of Texas (www.govcat.net). Its founders were instrumental in establishing the National Governmental Collectors Association in 2008, which promotes and supports the interests of governmental professionals nationwide (www.ngcagov.org). National Center for State Courts
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
John Dew, Executive Director Florida Clerk of Court Operations Corporation, State of Florida Michael A. Gatiglio, Finance Administrator, Revenue Enhancement Los Angeles Superior Court, California Gordy Griller, Principal Court Management Consultant National Center for State Courts, Court Consulting Services, Denver, Colorado Alphonso Jefferson, Jr., Support Services Department Administrator Office of Lydia Gardner, Clerk of Courts, Orange County, Florida Nadine Jenkins, President/CEO, National Governmental Collectors Association Director of Collections, Montgomery County, Texas Amy Johnson, FARE/DSO Business Analyst (Fines/Fees and Restitution Enforcement) Arizona Supreme Court Jim Lehman, Collection Program Manager Texas Office of Court Administration Jane Macoubrie, Court Research Associate National Center for State Courts, Court Consulting Services, Denver, Colorado For editing, Charles F. Campbell, Publication Specialist, External Affairs, Williamsburg, Virginia For layout design and production, David O. Sayles and Erika D. Friess, Program Specialists, Court Consulting Services, Denver Colorado An effort such as this cannot be conducted without the assistance of a great number of people. On behalf of the National Center for State Courts, the authors wish to express appreciation to all those who have shared their time, knowledge, experience, and insights.
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National Center for State Courts
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
INTRODUCTION Why should courts be involved in fine collections? There are a number of reasons courts should seek to improve collections. Improving collections: 1. Provides a means of ensuring compliance with court judgments, thereby increasing public trust and confidence in the judicial system. The enforcement of a fine is as important to the integrity of the court as the enforcement of any other sentence or judgment; 2. In terms of criminal sanctions, provides a mechanism for rehabilitating offenders, teaching responsibility, and discouraging further illegal or unsanctioned activity; 3. Allows measurement of court performance; and 4. Increases revenue generated in many local courts and statewide court systems. At the same time, courts need to pay attention to defendants’ perceptions of procedural fairness though attention to the language and consistency of sentencing and enforcement activities. People are more likely to comply with court judgments if they perceive the process as fair. There are many reasons a court might pursue a collections program. This publication combines information and resources collected over two periods of time. The original publication, Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, was based on observations, discussions, and documentation of current fine collection practices in the sampled courts and the reports of Institute for Court Management (ICM) workshop participants during 1993-1994. This updated, second edition includes information from the original publication as well as additional resources gathered during 20072009.
National Center for State Courts
During both of these time frames, a number of overlapping areas emerged: • •
•
What applies in traffic cases can often be applied to criminal cases. What applies to collection of fines can often be applied to collection of civil costs, restitution, recovery of the cost of indigent defense, probation fees, juror sanctions, red light photo tickets, and other governmental debts. Management techniques can be applied by whichever agency is responsible in a particular jurisdiction for collection of fines, fees, and other monies.
The principles and techniques are useful in collecting government obligations of any kind, e.g., adult civil, adult criminal, adult probation, juvenile criminal, juvenile probation, child support, hot-check reimbursement, EMS/Fire reimbursement, property tax, and public utilities such as sewer and water. The discussion and examples are aimed toward enforcing court orders. This publication is intended to be a practical guide to policies and practices for operating and managing a fine collection system. Terminology Use of the words “collections” versus “compliance with court orders.” “Collection of fines and fees” is shorthand for enforcing compliance with court orders, which is the purpose of collections by itself, or in connection with other sanctions issued by a court. Some jurisdictions have changed the name of the collections office to the court compliance office. Obtaining revenue to operate the courts through user-based fees is one of the realities of court funding, but this mercenary approach should not overshadow the purpose of maintaining respect for the rule of law and all that it entails.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Use of the word “court.” State and local judicial organizations vary in structure nationwide, and society continues using the word “court” as shorthand to cover all operations involved in setting policy for enforcing court orders, regardless of jurisdictional and organization details. A jurisdiction may have an elected clerk responsible for setting and implementing policies for collections. The sheriff may be responsible for collections of the county or parish. A municipal finance division may be responsible for actual collection of funds, and work with the municipal court in setting and implementing policies for collection of fines and fees. A county board or city council may set up a collection unit that collects a variety of financial obligations at the county or city level. Use of the words “defendant,” “debtor,” and “account.” These words are used interchangeably. An amount of money a court orders to be paid is a financial obligation, and the obligor is a defendant in a court case, whether it is a civil infraction or a criminal offense. An amount of money becomes an “account” when the person agrees to a payment plan or the obligation is referred to an internal or external collection unit. The term “account” is used in the collection industry. Use of the word “collections” and “collection.” “Collections” is used only as a noun, as in “improving collections.” “Collection” is used as an adjective, as in “collection agency” and “collection strategy.”
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National Center for State Courts
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
well. Whether or not the change within courts toward an increased role in improving collections is from government pressure, increasing lack of public trust and confidence, or financial desperation, many courts have made changes in their processes and procedures to improve the collection of fines and fees. These attitude changes and the resulting new programs are not just scattered local phenomena. On a state and national level, the perspective that courts should be aware and involved in the process of collection, and not just in assessing monetary penalties, is changing as well. There is increasing pressure and support for courts to be knowledgeable about their own collection practices and collection best practices, and to also modify their own practices, processes, and procedures as needed to improve collections.
Chapter 1 COURT COLLECTIONS OVERVIEW 1.1
Why Should Courts Improve Collections?
A tension has existed between courts and other branches of government over the level of responsibility and involvement courts should have in collecting the fines and fees they assess. This tension has increased over the past several years as governments have faced more and more financial constraints and public scrutiny. With the financial squeeze, the other branches of government have more closely reviewed courts’ expenditures, as well as potential sources of revenue (fines and fees), which come from court assessments.
Under the policy direction of the Conferences of Chief Justices and State Court Administrators, the National Center for State Courts provides information, resources, and tools to assist courts in improving fine and fee collection. The National Center for State Courts’ Web site states, “Consistent with the basic premises of fine administration, individual offenders must be made to pay their fines in order for society to have achieved its policy goals of punishment and deterrence and for the courts to maintain their own credibility.”1
Public trust and confidence in all government entities has also influenced changing attitudes regarding the appropriate role for courts in collections. We live in an age when trust in government institutions, including courts, is not automatic. When defendants perceive a court process or proceeding to be procedurally fair, there is every reason to expect greater compliance with court orders. The integrity, efficiency, and use of public funds by government institutions are widely and openly questioned. There is an increased expectation from the public that all government operations, including those of the courts, should be efficient, accountable, and costeffective. It is difficult to promote public trust and confidence in the judiciary without the courts supporting and encouraging programs and processes that improve the collection of fines and fees.
Indicative of the Conference of Chief Justices’ and the Conference of State Court Administrators’ support for collection improvement, both conferences approved court performance measurement including the CourTools. For example, CourTools Measure 7, “Collection of Monetary Penalties,” states: “Integrity and public trust in the dispute resolution process depend in part on how well court orders are observed and enforced in cases of noncompliance… The focus of this measure is on the extent to which a court takes responsibility for the enforcement of orders requiring payment of monetary penalties.” 2 Section 11.3 discusses “CourTools Performance Measure 7.”
The attitudes of other branches of governments and the general public are changing in regard to court operations and the court’s role in collections, and the attitudes within the judicial branch are changing as 1 2
www.ncsc.org See www.ncsc.org/D_Research/CourTools/tcmp_courttools.htm.
National Center for State Courts
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Changes in court involvement in the collection process are reflected by various state and local court initiatives and actions to improve collections. Though there are generally accepted core principles on what can be done to improve collections, there is no generally accepted standard for implementing those principles in individual courts, regional jurisdictions, or state processes and programs. States and courts are directed and limited in their collection policy decisions and program changes for many reasons. These include court organizational structure, statutes related to collections, available resources to improve collections, and current policies and procedures, as well as the laws, resources, policies, and procedures of other agencies involved in the collection process.3
1.2
The Importance of Courts Earning Defendants’ Compliance
This section was written by Gordon M. Griller, Principal Court Management Consultant, National Center for State Courts
Compliance has a broader meaning than collections. It is multidimensional. The objective of compliance is to facilitate cooperation or obedience. The court’s ultimate goal is to encourage more voluntary conformity. Collections are only one part of a compliance program. A collections program can be developed a as part of a compliance strategy, but conversely a collections program cannot easily grow into a compliance plan. What is involved in for court-ordered monetary directives other than collections? First, a compliance strategy relates to the basic purposes of courts. A parallel example: Think what would happen if everyone decided not to pay their taxes. The Internal Revenue Service depends on voluntary compliance. That is reinforced by the certainty of pursuit and consequences. This mindset has been ingrained in the public’s mind. A similar scheme applies with higher order concerns of society. If taxes aren’t paid, the government cannot do the things citizens expect that only the government can do: provide national defense, public works, and justice; safeguard property; and imprison criminals. Compliance with the law has two dimensions: 1. To do justice in individual cases. Justice is about applying the law to the facts of a case. This purpose of courts has to do with individual liberty. Here, some can win against the government. It’s about fairness whether the penalty is loss of freedom or loss of money or property.
3
The National Center for State Courts maintains information on court collections on its Web site. (See “Fines, Costs, and Fees Resource Guide” at www.ncsc.org/WC/CourTopics/ResourceGuide.asp?topic=ColFin [2003; updated 2009].) -4-
National Center for State Courts
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
2. To appear to do justice. This purpose is about all the other cases. About the consistent, predictable application of the law to similar controversies. It has to do with social order in society (balanced against individual liberty). If the courts are seen to be fair and persistent in the application of the law, more people will voluntarily comply with court orders and directives. Voluntary compliance is what society depends on. That is only possible if people conclude the courts are impartial and fair. Courts provide an arena for peaceful, fair, and impartial conflict resolution. When the dispute is between the government and an individual, a court of law is the only avenue toward a remedy. The Framers of the Constitution viewed an independent judiciary as a protector of individual rights guaranteed by the Constitution. Court is the only place where a person can triumph over government when government was arbitrary or wrong. (Arbitrary in this context means based on preference, bias, prejudice, or convenience, not on law or substantiated fact.) Without a conscientious, timely debt collections program, the legal status of a sentenced or convicted defendant may be in jeopardy without their even knowing it (i.e., a debt can move to warrant status, jeopardizing a defendant with possible arrest and loss of liberty when the court has not been conscientious about mailing notices of default, or timely quashing of a warrant when the debt has been satisfied by the defendant). Most court activity (50% of the time and money spent by courts) does not involve trials or adjudication processes, but making records of legal status. Swift, responsible action by courts, plus the certainty of consequences, has a strong deterrent effect on the general public. What happens when it is known that the court routinely will pursue failures to appear or to pay? National Center for State Courts
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As a public enterprise, the courts have an obligation to operate efficiently. High-performing courts are seen to be proficient and timely in their work. Judges – for good or ill – are tied to their orders. For the general public, the judge’s name on routine court orders, orders to show cause, or warrants carries significance. If issued in error or without timely, understandable remedies or ways to comply, it reflects personally on the capability and expertise of the judge. Poor or haphazard enforcement reflects negatively on the courts and justice in general.
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
1.3
Examples of Statewide Initiatives: The Role of State Judicial Leadership
Whether state judicial leadership comes from a desire to increase public trust or confidence or simply a reaction to the financial stress of the times, several state judiciaries have led the way to improve collections within their states by creating and implementing statewide initiatives. Externally imposed legislation has, at times, been the impetus for initiating programs. At other times, state judiciaries have created and sponsored legislation that could provide a better framework by which courts could change processes or develop programs to improve collections. Here are examples of the efforts taken by four state judiciaries to improve collections.
Texas With a decentralized court structure in Texas, much of the funding for the courts comes from counties. To improve funding in the counties and, therefore, the courts, the Texas Office of Court Administration (OCA) initiated a voluntary model Collection Improvement Program in 1998. This program provides information and technical assistance based on key elements to counties and courts on how to improve their collections. Even though the OCA has little direct budget or funding responsibility for the courts, the program was designed to assist cities and counties in improving the collection of fines and fees assessed by the courts. Since most of the funds collected are retained locally and used to fund local programs, it was a way to help improve funding for the courts. Benefits of the Collection Improvement Program are that it encourages personal responsibility by those assessed and it increases revenue. By May 2005, the OCA had assisted with the development of 69 collection programs serving 237 courts. These voluntary programs had an overall increase in collection revenues in 2005 of 86 percent, or $42 million. The increase in collections was the catalyst for legislation in 2006 that created a mandatory collections improvement program targeting the largest cities and counties in Texas.
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National Center for State Courts
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Table 1 Texas Collection Improvement Program Key Elements 4,5 1. Staff or staff time dedicated to collection activities. This may include local staff or contractor employees. 2. Expectation that all court costs, fees, and fines are generally due at the time of sentencing or pleading. 3. Defendants are required to complete an application for extension of time to pay if payment in full is not made immediately. 4. Application information is verified and evaluated to establish an appropriate payment plan for the defendant. 5. Payment terms are usually strict (e.g., 50% of the total amount due must be paid within 48 hours; 80% within 30 days; and 100% within 60 days). 6. Alternative enforcement options (e.g., community service) are available for defendants that can demonstrate their inability to pay. 7. Defendants are closely monitored for compliance, and action is taken promptly for noncompliance. Actions include telephone contact, letter notification, and possible issuance of warrant. 8. Local staff may contract with private collection agencies or firms for the provision of collection services on seriously delinquent cases (61+ days), after in-house collection efforts are exhausted. 9. Application of statutorily permitted collection remedies, such as programs for nonrenewal of driver’s license or vehicle registration. 10. Issuance and service of warrants, as appropriate.
4 5
Texas Office of Court Administration (updated 2008). “Collection Improvement Program.” Texas Courts Online (www.courts.state.tx.us/oca/collections/collections.asp).
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Arizona The interest by the Arizona Administrative Office of the Courts (AOC) in improving court collections began with a fiscal crisis during 2000-2003. The AOC initiated the statewide Arizona Fines/Fees and Restitution Enhancement (Arizona FARE) program as an alternative to anticipated large budget reductions and forced court layoffs. The program is a voluntary statewide collection unit for courts that uses various initiatives and processes to maximize collection potential. The program has two parts: one component deals with backlog processing and the other component takes responsibility for all collection tasks from the time of charge filing.
The Arizona FARE program, a public/private partnership of the state courts, which includes the state Motor Vehicle Division, the state Department of Revenue, and a private vendor, began in July 2003. The program is designed to enforce compliance with court orders and law and increase revenues. The Arizona FARE program is in 115 courts in 13 counties. Approximately 1.8 million cases have been submitted.
Table 2 Arizona Fines/Fees and Restitution Enhancement Program Services6 1. Reminder notices
5. State-tax-intercept program
2. Delinquency notices
6. Vehicle-registration holds
3. Web-based and IVR credit-card payment (English and Spanish)
7. Credit-bureau reporting
4. Electronic skip tracing
8. Outbound phone calls
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Arizona Courts-Collections. “Fines/Fees and Restitution Enforcement (FARE) Program.” PowerPoint presentation (www.search.org/files/ppt/MN-Day2-Byers.ppt). -8-
National Center for State Courts
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
collect fines, costs, and assessments and codified the process to collect funds from prisoner accounts. Effective January 1, 2006, the Michigan Collection Legislation authorized that fines and fees could be collected at any time regardless of whether a defendant is on probation, has had probation revoked, or has been discharged from probation. The legislation also allows that courts may require a wage assignment to pay the assessed costs. This legislation was then amended effective January 9, 2007 to allow courts to order defendants to pay any additional costs incurred in compelling the defendant’s appearance. This allowed courts to put the financial burden for nonpayment back on the defendant and not on the court. Table 3 below shows some of the tools that courts have used since this legislation was enacted and the reported results.
Michigan The Michigan Supreme Court started with the assumption that one of the guiding principles of a successful collection program is having judicial support. The Supreme Court appointed a collections advisory committee, consisting of judges and a court administrator, and approved the committee’s recommended collection strategy. This strategy included appointing regional subcommittees to promote the Supreme Court’s approved collection strategy. The subcommittees, which include judges and court staff experienced in various collection techniques, also provide training on practical and tested collection techniques throughout the state. Another aspect of the Michigan program, accomplished in conjunction with legislation, focused on the court’s authority to sentence and
Table 3 Michigan’s Tools for Collecting Fines and Fees 7 Tools
Examples of Various Courts’ Results
1. Orders to remit prisoner funds: Court orders to collect fines and fees from prisoner accounts
51% of court orders on prisoner funds collected statewide, resulting in $3,525,375 during a three-year period.
2. Delinquency-notification software: Software developed internally by a Michigan court that was purchased by the SCAO so it could be provided to other courts at no cost
10th District Court sent 32,453 notices and collected $1,352,546 at a cost of $24,893 during a 20-month period.
3. Show-Cause process
47th District Court collected $1,492,279 during the three years the show-cause docket was in place.
4. Court-ordered wage assignments
47th District Court has issued 102 wage assignments in a 14-month period and collected $47,121.
7
Schaefer, P. D., and E. A. Barber (2007). “Court Collection Advisory Committee Interim Report.” Michigan Supreme Court, State Court Administrative Office, Lansing (courts.michigan.gov/scao/services/collections/01-07InterimReport.pdf). National Center for State Courts
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
•
California Chief Justice Ronald M. George called the collection of court debt a top priority in his 2003 State of the Judiciary Address. Following that address, the California Judicial Council established the Collaborative Court-County Working Group on Enhanced Collections. By August 2004, the Judicial Council had adopted several policies to improve statewide collections based on the recommendations that came from the working group. These included policies for: • Definitions of delinquent accounts or payments; • Standards for discharging court-ordered debt; • Establishment of trial court and county committees to increase collections and compliance;
• •
Courts and counties to submit midyear and year-end collection reports on Judicial Council-approved templates; Development and support of legislation that would allow courts and counties to charge installment fees; and Process to develop standards and guidelines for courts in approving or denying fee waivers.
California is also using a legislated cost-recovery program. This program allows a court or county that maintains a collection program for delinquent fines, penalties, assessments, and fees to deduct certain expenses for that program before making any distribution to the state. To qualify for the costrecovery program, the collection program must meet at least 10 of 17 collection criteria, see Table 4.
Table 4 California Comprehensive Collection Program Criteria 8 1. Issue monthly billing statements
10. File liens on real property and proceeds of sale
2. Make telephone contact with debtor
11. File claims of objection in bankruptcy
3. Issue warning letters
12. Coordinate with probation department to locate debtors
4. Request credit reports to assist in locating debtors
13. Suspend driver’s licenses
5. Access employment development dept. 14. Accept credit-card payments (EDD) 6. Generate monthly delinquent reports
15. Participate in FTB court-ordered debt program
7. Participate in FTB tax-intercept program 16. Contract with private debt collectors 8. Use department of motor vehicles information to locate debtors
17. Use local and national skip-tracing locator resources
9. Use wage and bank-account garnishments 8
California Judicial Branch (2008). “Statewide Administration: Enhanced Collections Project.” Programs: Innovations in the California Courts. Web site (www.courtinfo.ca.gov/programs/innovations/stateadmin-2.htm). - 10 -
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
These four examples demonstrate that despite differences in organization and legislative approach, states are making successful efforts to improve collections. Even when programs are voluntary, leadership and encouragement coupled with practical assistance from the state-level judiciary can significantly improve the collection process by providing tools to guide courts and help them improve collection processes. Michigan’s judiciary found that by promoting best practices, training, and successful pilot programs, there has been competition among individual courts to improve collections. When court leaders show interest and do their part to improve collections by using whatever principles, programs, or processes work within their own justice system, they can gain increased trust from the public, other branches of government, and funding bodies.
1.4
Local Judicial Leadership in Improving Collections
It is difficult, if not impossible, for any court to develop a process for improving collections without the support and leadership of local judges. Often judges feel that collections or enforcement of their orders is not their responsibility. Yet as Michigan pointed out through their development of a process for collection improvement, a successful approach has to be led by the judges. In Michigan this effort began with the philosophy and direction of former Chief Justice Maura Corrigan. Justice Corrigan’s philosophy is that enforcing court-ordered financial sanctions should be a top priority for two reasons: the judiciary’s credibility is at stake and the judiciary has the responsibility as the third branch of government. She felt that courts must send the public a firm and consistent message that offenders will be held accountable. The Michigan Supreme Court then organized task forces, which included judges, to develop tools and training to assist state courts. In a training video for judges to improve collections,9 Judge Phil Schaefer, former 9th Circuit Court Judge in Kalamazoo County, Michigan said, “In the final analysis, the success of any collections effort is directly proportional to the level of the commitment of the judiciary. A court may have the most capable and devoted employees in the world, but unless the judge leads, they cannot follow.”
9
See “Collection Video and Audio Library” at www.ngcagov.org/videolibrary.htm.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Some of the ways to encourage and train judges include: 1. Use chief justices and presiding judges to lead other judges by setting the tone during presentations. 2. Involve judges in the development of strategies and processes for improving collections. 3. Establish court collection advisory committees at state and/or local level that are led by and include judges. 4. Develop training materials for judges that help them improve their performance in collecting court-ordered financial obligations. 5. Educate judges on how the judiciary’s responsibility to enforce court-ordered sanctions enhances the integrity of the court. 6. Encourage judges to present best practices to other judges (judges training judges). 7. Provide and educate judges on performance measures such as collection rates (promotes competition). 8. Document ways that judges can simultaneously manage fine enforcement without sacrificing individuals’ feelings of procedural fairness. 9. Advocate the inclusion of collection education as part of the standard agendas or curriculums for local, state, and national judicial training workshops, seminars, and conferences.
1.5
Attributes of a Successful Collections Environment
Lack of compliance in paying fines and fees denies a jurisdiction revenue and, more important, calls into question the authority and efficacy of the court and the justice system. Tight operating budgets, the search for additional funding for courts, and a continuing desire that court orders command the respect of defendants have combined in recent years to increase interest nationwide in collection of fines and fees. Each court must examine a number of fundamental issues when seeking to improve its collection of fines and fees. Three issues – court philosophy, community perception, and resource commitment – are recurrent themes in courts. Courts that have been the most successful in collecting have (1) adopted a philosophy that active, if not aggressive, collection is the right approach to take; (2) decided to improve community perceptions; and (3) dedicated some staff and other resources to the collection effort. Courts that have not made progress in fine collection have probably not yet grappled with these issues. Court Philosophy The perception among judges and court managers in many jurisdictions is that if their own locality is economically depressed, then many traffic and criminal defendants are unable to pay fines and fees, particularly in cases involving a mandatory fine or jail sentence. However, experienced collectors consistently assert that all but a very few defendants have greater resources for meeting their obligations than may be immediately apparent. A court needs to agree internally on its collection philosophy. Courts can respect individuals’ ability to pay by using payment plans and other tools, so that fines are collected and individuals still feel they have experienced procedural fairness.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Community Perception “Word on the street” in every jurisdiction makes the public aware of the local level of fine enforcement. It may be common knowledge, for example, that there is no room in the jail for defendants arrested on warrants or that nonpayment of fines and fees will not trigger a violation-of-probation proceeding. A court needs to decide whether it will seek to change or influence the “word on the street.” Resource Commitment Every locality has a relatively small percentage of hard-core defendants who either will not pay their obligations, whatever sanction is applied, or will eventually be impossible to locate. However, a much larger percentage of defendants will pay all or part of the amount owed if 1) payment can be made without too much inconvenience, and 2) increasingly coercive measures are applied by the collector. A court needs to determine how much effort to expend on a particular class of offenses in relation to the benefit received.
performance and particularly CourTools, courts are encouraged to determine their baseline and then set standards and measures that best fit their individual jurisdiction and resources. Performance measurement is an important aspect of all court processes. Measuring the success of fine and fee collection should be a vital aspect of any court’s measurement. Some successful courts that track statistical information report that they collect more than 90 percent of the fines and fees assessed, and this is obviously a good result. Given the depressed economic conditions in certain areas, the transient and unemployed (or underemployed) character in an area’s population, or merely the relative size of a jurisdiction, comparison of collection results of any two jurisdictions is problematic. One can be certain, however, that collections in any given jurisdiction can be improved by applying additional collection techniques.
A problem encountered in some courts is a lack of useful management-reporting information for fine collection programs, or failure to use information available. Courts with standard or ad hoc reporting capability through a case management system typically have data on collection rates or average times to complete payments already in a usable format or that can be exported and further analyzed in a spreadsheet. Please see Chapter 11, “Operational Information and Performance Measures,” for more information. In many instances, even courts that keep current data fail to track baseline collection rates before implementing new procedures and can measure the effect of new procedures. Because of this general lack of information, there is little more than anecdotal evidence supporting the effectiveness of many of the strategies presented in this Handbook. NCSC is often asked if there is any national standard collection rate. There is no national standard, given the many differences in jurisdiction, socioeconomic conditions, and demographics. With court National Center for State Courts
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intervene, and even defendants who initially leave the courthouse with the best intentions may fail to complete their scheduled payments.
Core Principles
No court can do everything. Successful programs should focus on changes that provide the most improvement at the least cost. In selecting those processes, courts need to base all decisions in the core principles of improving court collection. By developing guidelines, principles, or characteristics for successful collection programs, state court systems and individual jurisdictions can influence and encourage collections improvement. Though the wording, format, and even level of detail may differ in the way the information is presented, the elements, components, standards, or guidelines can mostly be traced to what may be considered the core principles for successful collection programs. Several states have developed standards, best practices, or principles to implement successful collection programs. Texas encourages the development of successful collection programs with their key elements. California uses a comprehensive set of collections components to guide courts in determining successful collection programs. Michigan provides a publication called “Trial Court Standards and Guidelines” to assist courts in implementing successful processes.
Consistency One principle of justice is to treat similarly situated defendants alike. Inconsistent practices among the members of the bench encourage judge shopping and cynicism. The court needs to develop consistent sentence enforcement and related policies and solicit the commitment of all judges to those policies. In 1994, when the NCSC project staff visited 40 courts in 22 states to review collection procedures and during the 2006-2008 review of collection practices and programs for the update of this publication, the more successful collection programs followed some or all of the following core principles. These are not all inclusive or limited by the language used. The core principles presented could be considered as an evaluative tool for a collection program or a starting place to determine aspects that may be added to a current program.10
Whatever the fine collection strategy adopted, any court’s program could be improved by implementing two general guidelines: No Delay One important rule of fines and fees collection is that the longer the delay between sentencing and payment, the less likely it is that the defendant will pay. Procrastination is a common human characteristic. Given the chance, many people will avoid unpleasant tasks like paying a fine; therefore, a court must not give them the chance. If enough time elapses, other more immediate debt obligations may 10
• • • • • • • • • •
Showing judicial and administrative commitment to collecting fines and fees Clearly defining responsibility for collecting fines Setting short time periods for payment Communicating to a defendant what is expected Establishing and adhering to collection procedures Setting collection goals and monitoring performance Responding immediately to nonpayment or nonappearance Having a range of effective sanctions for noncompliance and using them similarly in all cases Maintaining strong financial controls Ensuring that procedures are understood by everyone, including judges, the prosecutor’s office, court staff, defendants, and the bar
See www.ncsc.org/WC/CourTopics/FAQs.asp?topic=ColFin#FAQ265. - 14 -
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1.7
Designing a Court Collection Program
Just as no one court or even any state court system is the same, court collection programs need to be uniquely developed to fit a court or court system, considering the court’s available resources, both internal and external. Starting with its core principles, a court can build the collection vehicle that works best in its environment. In Texas, that may be a Mack truck; in California, it may be a hybrid gas/electric car. Each is different, yet similar because of those core principles, which comprise the engine, steering, wheels, and brakes. The biggest difference from 1994 to 2009 is that readers don’t have to work with concepts; they can consider many new and improved models in operation and decide how they want to build their own.
Choice of Collection Models Operationally, there are three collection models that courts can consider, or use in combination. These can be called: 1) mostly notification, 2) noncompliant sanctions, and 3) the internal collections model. These different approaches to collections in Table 5 are either an implicit or conscious choice, and have an impact on results.
Table 5 Three Court Collections Models Mostly Notification •
•
•
•
Bench conveys expectation of payment in full or minimum payment on adjudication Fine reduction as appropriate in circumstances Alternatives such as traffic school or community service Installment plan written and given
Noncompliance Sanctions •
Credit-bureau-reporting threat
•
Phone calls to past-due accounts (after X days)
•
Show-cause hearings
•
•
Immediate license suspension
•
Immediate bench warrant threat
Staff interviews with individuals needing special attention due to circumstances
•
•
Bench warrant served
Scheduled payment hearings with judge
•
Vehicle registration suspended until payment
•
Skip-tracing practices and resources similar to an external collection unit
•
Voluntary assignment of wages
•
Referral to external collection service after X days and X effort
•
Reminder notices
•
Multiple ways to pay conveniently
•
Wage or bank-account garnishment
•
Few or ineffective sanctions
•
Setoffs against tax refunds, etc.
National Center for State Courts
Internal Collection Unit
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•
• • •
Issues to Guide Policymaking Is your court more comfortable with developing an internal collections staff to handle recalcitrant defendants, or with more coercive sanctions? If you choose more coercive sanctions, what steps will you use to ensure that defendants feel procedural fairness? Which sanctions will be effective in your location? While the internal collections staff may be intuitively appealing, can you make this activity effective enough to justify the cost?
Role of In-House Collection Unit Internal resources should include judicial support for collections, staff, and technology. The current resources should be assessed as well as the potential for future resources. Please see Chapter 6, “InHouse Collection Unit,” for more information. Court collection programs range from the in-house programs that are responsible for all aspects of court collection, to programs that turn all collection activities over to an external entity soon after judgment, with most somewhere in-between, using some criteria for referring accounts to the external entity. Programs that are in-house may be internal to the court and report to the court or be a support division set up to provide all collection services to the court. These programs are responsible for all aspects of a collection program: from the time the defendant is sentenced until the fine and fee is completely paid. There are also programs that focus on only one aspect of collections. Role of Contracted Collection Services External resources could include public and private entities that may provide services, such as hosted collection tools like address verification and skiptracing services, and collection agencies. It would also be important to assess the potential for partnering with other courts, divisions, or branches of government that could share resources and services. Please see Chapter 7, “Contracting Collection Services,” for more information.
Role of Technology The courts visited during the technical assistance project in 1993-1994 and those studied and reviewed during the 2006-2008 time frame ranged from small, rural courts to some of the largest urban courts in the country. Most have automated case management systems of varying degrees of capability, although a surprising number maintained essentially manual recordkeeping systems, or automated systems with significant manual processes to support automation. In Arizona, for example, the (mostly) statewide case management system allows the user to keep records of payments, court proceedings, disposition changes, etc., within the system. While the system does record payments, it is limited in the capability of breaking out payments applied to cases with more than one defendant and where joint and several payments toward restitution is ordered. Because of this, many courts use a manual recordkeeping system for these types of cases in the form of a “pay card” that is placed in the individual files of the defendants. This leaves room for error. The new case management system that is currently being rolled out to Arizona courts is designed to better accommodate joint and multiple payments and eliminate the manual procedure. Please see Chapter 10, “Use of Technology in Collections,” for more information. Collection Phases In addition to choosing a collections model, courts should structure collection activities in relation to time periods such as 30-60-90-180 days. Earlier activities increase payments. By understanding which activities affect the different phases of collections, you can work out a plan to focus certain efforts during a collections phase, then measure results by phase, and then gauge how effective (and cost-effective) different activities are. A court’s first focus should be to encourage immediate payment, beginning at adjudication. These first activities involve mostly judge and staff communication, so these collections activities can occur at no or minimal additional cost. Opportunity lost at this point means more activity is needed later, and adding later activities incurs greater costs.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Table 6 sets forth collection phases and activities associated with events, beginning with adjudication, and extending by monthly or other intervals as events occur. After the first 60 days, a defendant’s level of responsiveness to communications will usually become clear and will determine what the most effective approach will be. The court should
“work the account” by communicating with the defendant as long as payments are received, and refer the account to external collection services when the defendant stops communicating or stops paying. Please see Chapter 11, “Operational Information and Performance Measures,” for more information on determining performance measures.
Table 6 Activities by Collections Phase Activities with Direct Impact on Amounts Collected
Actions with Supporting Considerations
At Adjudication Defendants advised that payment in full Process and documents to communicate is expected, unless there are special expectations, rights, penalties, and circumstances Minimum payment (20-50%) requested at procedures are easily available to defendants and are in accessible adjudication if not paid in full language (including translation as Payment plans may be used, but not for needed) small amounts (unless exceptional Process to set up payment plans circumstances) Process to track alternative sanctions Payment plans given to defendants include amounts and due dates
First 30 Days after Adjudication Reminder notices sent that clearly spell out penalties, give payment options again
Does the system provide capability to efficiently send mass notices?
Second Month (by 60 days) Escalate language in reminder notices Show-cause hearings for noncompliance Bench warrants for failures to appear or pay or those failing to show cause License-suspension notices sent to DMV (after notice, as required by law)
Calculate the age of financial obligations and percent received, to track the effectiveness of activities by time phase Process to implement sanctions
Third Month (by 90 days) Escalate language in reminder notices Show-cause hearings for noncompliance Bench warrants for failures to appear or pay or those failing to show cause
Process to implement sanctions
From 90 to 180 Days Continue previous efforts
Consider referral to external agency
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Cost of Collections in Relation to Return In designing a court collection program, cost for increasing internal resources or accessing external resources needs to be weighed against the potential return. Figure 1 illustrates the relative number of people who always pay, might pay, and never pay. Represented by the bulk of the triangle, most people respect the law and fulfill their obligations and pay promptly or with some prodding. At the other end, a relatively small number of people try to avoid their obligations, and an inordinate amount of effort may be required to obtain compliance.
Figure 1 Proportions Resources Needed to Collect and Willingness to Comply
1.8 Programs Combining Internal and External Resources External resources for court collections can include public or private collection agencies. These agencies can do all or part of the collection process. The decision of when to use external resources is generally dependent on when the court chooses to refer the debt to someone else when it is not costeffective to handle the debt in house. Many courts and states use this approach but in various ways. The primary reasons for courts to use collection agencies is that often there are not resources to do anything more internally, and courts don’t often think improving collections is their primary business. Too often courts turn collection tasks over to other entities rather quickly and do little other than collect what people are willing to pay. Statistics show that the largest percentage of money is collected during the period of time closest to the assessment. During this early period, there is often much that can be done internally with a modest investment, either using technology or people, that can improve collections for the court.
A collection program should focus its efforts primarily on the category of those who might pay, since many people need some encouragement or just a reminder. Certainly a court’s processes and procedures should encourage and ease the process for those who will pay. But the focus of “what else is needed in our collection program” should be on the category of those who might pay.
Some courts have access to county or state governmental collection agencies that may be part of another branch of government. For example, Utah has an Office of State Debt Collections, as do a number of other states. When a party is given time to pay they are put on a payment schedule. Those payments are made directly to the clerk’s office. If a party is delinquent in payment for more than 90 days, the clerk’s office forwards the debt to the Office of State Debt Collections, an executive-branch agency. The office is statutorily charged with collecting all bad debts owed to the state. This public collection agency uses all the collection tools that a private agency may access. The advantage of an already established governmental program is that the court does not have to solicit proposals, select vendors, or manage
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delinquent collection processes. Although it requires a commitment, It takes few additional resources since the only current collection efforts are considered within the clerks’ and cashiers’ normal workload. The disadvantage is that the courts have little control over improving collections that are delinquent more than 90 days. The courts also have no selection options for the collection vendor. If the state collection agency has good practices and uses all available collection tools, court collections as well as other state collections will improve. If the state collection agency is not doing everything possible, the court cannot do as much to improve the process. When a private vendor is used for delinquent payments, potential competition can improve the choices for the court. The Superior Court of Los Angeles uses the RFP process to its advantage by insisting on certain tools in the vendor’s toolkit, such as additional warning letters, tracking reports, and management reports. The reports allow the court to watch for activities in the process and anticipate improvement. Another important aspect of using a private vendor is that a collection vendor should have tools and strategies already in place to collect. A court would need to acquire the skills or tools to collect. The negative side to using a private vendor is that the process needs to be managed. There are usually RFPs to develop and then vendors to select and manage. This takes additional resources. It also costs to use a vendor; these costs may be absorbed by the court or the vendor as a cost of doing business, negotiated between the two, or passed on to the debtor. In selecting a vendor, it is important to talk with other courts or jurisdictions who use vendors for similar services and compare costs of service. Costs for the same vendor and same services may still not be the same for two courts or jurisdictions due to the size of the potential collection caseload and potential return. It is also important to compare the cost to use a private vendor with the cost of collecting internally.
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The range of activities and tools vendors can use in collections varies greatly. It is important to understand and compare the differences and the value of using each of them. Not every court needs to or will benefit from every tool on the market or strategy known. A unique hybrid of using a public and private collection agency is the Fines/Fees and Restitution Enforcement (FARE) Program in Arizona. This program, under the Arizona Administrative Office of the Courts, is a public and private partnership. The Arizona State Courts, Department of Revenue, and Motor Vehicle Division partner with the vendor. This collaborative effort allows for many useful tools to improve court collection efforts. The courts in Arizona can choose to participate in an array of compliance and enforcement services. The courts can opt in at any point in a case, as soon as assessed or when it becomes delinquent. The other unique feature is that a court can use the services of FARE as well as those of another collection agency. The approach encourages both FARE and private vendors to compete. By doing so, the logic is that the courts will have many choices and not have to fit into the same size box as other courts. The difficult aspect of this approach is simply that not every state or local jurisdiction will have the resources to initiate its own court-focused public entity.
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Chapter 2
2.1
COLLECTION BEST PRACTICES This chapter discusses best practices in court collections, and the following chapters elaborate on certain specific areas. This chapter presents an overview of best practices, and necessarily simplifies some of the ideas presented. Each section header is a best practice. Table 7 at the end of the chapter summarizes the best practices and provides a checklist, so that readers can summarize the practices already in use in their locations, practices that might be considered, or practices that cannot be considered locally for various reasons. Throughout this chapter, we will also point the reader to other chapters where a technique is discussed in greater detail.
Create Payment Expectations through the Fine Collection Atmosphere
Courts with the best collection programs convey an expectation from the beginning that fines will be paid in full and as quickly as possible. These expectations are expressed by notices from the court and statements by the sentencing judge emphasizing payment on day of sentencing and by immediate action in cases of overdue payment or nonappearance. Courts with the best programs consider the timely payment of fines as important as the enforcement of any other court sanction. While revenue enhancement is not ignored, the greater emphasis is on ensuring appropriate respect for the court and its orders. Practice Tips A few judges and administrators take the position that “courts should not be in the business of collecting money” and dismiss the need for court concern with fine collection. As noted earlier, this thinking in the courts seems to be changing. It was also stated earlier that successful collection programs require leadership, direction, and followthrough by the judges. Some judges are concerned that many defendants in their locality are poor and have no ability to pay court obligations. Community service is the primary method for this segment of the population to meet their obligations. While care should be taken to avoid depriving defendants’ families of life’s necessities, pressure can conscionably be applied in many cases to force defendants to accept and pay for their mistakes in a manner appropriate to their means. This goes to the heart of maintaining the credibility of the justice system and ensuring that justice is fairly and evenly administered.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
2.2
Practice Leadership and Commitment
Court leaders (the chief or presiding judge and the court administrator or clerk of court) set an example for other judges and court staff in collecting fines and fees. They do this from the time a defendant is sentenced through the time a fine is paid in full or declared uncollectible. Leaders need to create the expectation that the fine will be paid each time a defendant has contact with the court, whether with staff, by personal appearance in court, by service of process, or by telephone or mail. This requires a commitment of resources: court staff dedicated to collection, court time dedicated to sending the proper message to defendants, and technology dedicated to providing information to manage collections.
majority of the court’s judges. Collection programs that are struggling, despite strong administrative backing, generally have judicial personnel who are disinterested or hostile to fine collection initiatives. Upon observing collection programs at sample courts nationwide, it appears that a collection program cannot be successful without strong, consistent support from the bench.
Practice Tips Leadership from the top is necessary to the success of any organizational effort, and commitment means involving other participants in the justice system – clerks, court administrators, prosecutors, probation officers, law enforcement officers who serve warrants, and jail managers. In some jurisdictions, justice agencies do not regularly talk to each other about fine collection or any other topic. In jurisdictions with successful fine collection systems, justice system participants discuss enforcement and other issues; clerks and law enforcement officers verify that warrants have been served or canceled; jail managers reserve jail slots for executed warrants; probation and parole officers notify the prosecutor or the court when a defendant is released from prison with an unpaid fine; and prosecutors use civil collection techniques (property liens, wage and bank account garnishments, or sheriffs’ sales, as state law permits). Judicial commitment to fine collection may be the single most critical factor. Without exception, the most successful programs enjoyed the backing of a National Center for State Courts
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
2.3
Set Collection and Information Goals
Court leaders should set attainable and measurable goals to improve fine and fee collections. Even if sophisticated management information is not available, court leaders can set goals for the other elements of successful programs. Many courts have no collection procedures, no plan to reduce the backlog of unpaid fines, not even a part-time staff person tackling the collection problem. Even modest goals can make a significant difference. The type of goal most commonly associated with caseflow management systems is a time standard for case disposition. Likewise, time standards for average time to successful completion of fine payments also should be established. Interim event time goals can be set. For example, by establishing the times for issuing notices or warrants, or for setting a hearing following default, leaders can help reduce delay in collection procedures. The most successful collection programs also have goals for average amounts collected, measured in the numbers of defendants completing payments and percentage of amounts ordered that are collected.
simple as a weekly or daily “tickler” filing system. For example, a chronological register can be set up and defendants’ documents filed by appearance or due date. As payments are made, the documents are moved to the next due date or the closed-case file. Any documents remaining after a date has passed should indicate defendants who have failed to appear or pay as ordered, and immediate action can be taken. Practice Tips Court leaders may convene a fine collection task force of justice agency personnel to set goals and meet periodically to review progress. The task force should include technology staff or a representative of the court’s software vendor to ensure that information will be available to measure progress toward goals. In earlier years, good management reports appeared to be the exception for fine collection programs. As technology has become more prevalent and improved in courts, there is an expectation that good management reports will be available.
Monitoring procedures should be developed to allow the court to measure program outcomes against goals regularly. Regular performance monitoring provides the court with an “early warning system.” If collection rates drop or times to completion begin to lengthen, the court can review and adjust its procedures before a more serious problem develops. At a minimum, monitoring and managing of fine collection requires regular exception reports of defendants who have not appeared or paid fines or installments as promised. These individuals can then become targets of prompt collection activity: pastdue notices, suspension of driver’s license, phone calls, contempt hearings, motions for violation of probation, or issuance and service of arrest warrants. In a manual environment, the timeliness of payments can be tracked through a procedure as - 22 -
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
2.4
•
Use a Systematic Communication Plan with Defendants
•
Communication with defendants from the very beginning of the collection process is far more effective than later attempts to make contact. Many defendants do not have stable addresses and can “disappear” very quickly. A good practice is providing written notice, whenever a defendant appears, of the defendant’s next due date or hearing. By doing so, they have proof that notice was given and avoid the costs of written or personal service. In the best programs, judges have developed regular concordant procedures and communication steps to help ensure enforcement consistency. Staff members are made aware of the court’s expectations and receive training in the fine collection process. Successful collections often require the cooperation of other justice agencies. A court initiative that requires the service of warrants or jailing of delinquent defendants is not likely to succeed if local law enforcement is not closely involved in its planning and execution. Communications need to clearly spell out what is expected, when it should occur, and the consequences of noncompliance. Practice Tips Communicating the importance of paying a fine begins before adjudication and with the sentencing judge. Communicating both the estimated amount, as well as the fact that payment is expected on the day of sentencing, is an effective way to maximize collections. Courts should: • Inform defendants from the bench at the initial hearing or pretrial that payment is due upon assessment and provide an estimated amount due.
•
Advise defendants at the probation screening of the date payment is expected and the amount of the expected payment. Ensure that court personnel notify litigants at all court appearances of the date that payment is expected. Educate the local legal community that payment is required at the time of assessment.
Many traffic dockets are so crowded that tailoring payment terms is barely thinkable .Successful courts all have a judge who tell defendants: • That payment must be made that day or within 24 hours. • That an arrest warrant will be issued for failure to comply. • That failure to pay violates a condition of probation. On the contrary, consider the message sent by a judge who gives every defendant 30 days to pay, with or without discussion with the defendant. Some judges communicate their attitude toward collection by giving a harsh sentence at the beginning of their docket, by ordering defendants to empty their pockets, by arranging a “good guy/bad guy” routine with the bailiff, or by taking a thumbprint or photo. Past-due notices can threaten to report the fine to a credit-reporting company, publish it in the newspaper, or post it at the library. Although some criticize these practices as intimidating, judges should examine their verbal and nonverbal messages and decide what is effective and what meets their personal standards. Through the Michigan Supreme Court’s State Court Administrative Office, training videos have been developed that provide actual examples for judges in how to and how not to communicate the payment expectation to defendants. 1
1
The Michigan Web site is password protected, but many of the videos can be viewed at the “Collection Video and Audio Library” at www.ngcagov.org/videolibrary.htm. National Center for State Courts
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Some courts post signs in the courtroom, hallways, and at the clerk’s counter that fines are expected on the day of sentencing. Others require defendants who want to delay payment to report to the judicial enforcement unit (often a single staff member working full- or part-time on collection) for approval of installment payments. In the majority of these courts judges refuse to discuss payment terms in the open courtroom. Setting a payment plan from the bench not only wastes judicial time, but also tends to lead to “mass” poverty. When the remaining defendants hear that delayed payments are available, everyone may then assert a claim for additional time. These courts have found that the better practice is to send defendants to a judicial enforcement officer or the clerk’s office to complete an application for a delayed payment arrangement. In Montgomery County, Texas, all defendants, even those planning to pay in full that day, are required to report to the collection unit immediately following the court hearing. This enables the judge to only deal with the next step of going to the collection unit and not having to deal in the courtroom with any discussion of the fine, fees, or payment. A few courts notify counsel in advance that sentencing will not proceed without payment of a stated amount. Others will not permit a time payment arrangement or extension without at least a minimal “down payment.”
2.5
Establish Follow-up Processes
Collecting fines begins in the courtroom, as indicated earlier. But if defendants choose not to or cannot pay in full, courts will need to decide on the followup process that best suits the local philosophy and needs. While the general strategies discussed appear consistently in successful collections programs, specific procedures can, and must, be tailored to meet an individual court’s philosophy, local legal restraints, and goals established with other justice agencies. Examples of how court philosophy, laws, and goals can affect the shape of a collection program, include the following (among many possible examples): •
•
•
•
•
•
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Judicial commitment to collection programs requires a certain level of buy-in and consistency in the courtroom among judges who levy and enforce payment of fines. The court must decide what regimen of phone calls, past-due notices, contempt citations, bench warrants, or other techniques is effective and can be managed, given staff resources available. In traffic citation cases, a court may desire or be required by law to notify offenders of an impending license suspension and issuance of warrant. Whether courts can recover fees for costs of collections is a matter of the law or ordinance in your jurisdiction. Individual court circumstances and technological and staff resources will determine whether it is economical to use the “lock box” services of a bank, a Web-based payment system, an addressupdating service, or an external agency for collections. Taking into account the court’s political climate and accounting procedures, the court must decide if or when an account can be declared uncollectible and “written off” or made inactive, and at what point, if ever, an arrest warrant or capias can be recalled or canceled. National Center for State Courts
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition •
So as not to overwhelm them, the court must seek accommodations with law enforcement, jails, and other justice agencies on such matters as warrant sweeps, publicly run community-service programs, and local jail capacity for willfully noncompliant defendants.
If courts intend to pursue collections, they need to identify procedures by which to handle collection from individuals. An example is the means by which defendants are allowed to pay fines. Successful collection systems make payments as convenient as possible by accepting checks and credit cards. Although some court leaders believe that the inconvenience of paying in cash or money order only is appropriate additional punishment, many courts accept personal checks and only infrequently encounter bad checks, and keep a list of who passed the bad checks. Many courts now accept credit cards. In some states, credit card acceptance is statewide. In others, it is on a county-by-county basis. With a society that functions on credit card use for practically all purchases, an increased use of credit cards at the counter, over the phone, or on a Web site, can improve collections. The policy regarding who pays the credit card fees varies. Many jurisdictions absorb these costs because they find that the savings in receiving, accounting, and collection costs far outweigh the amount of the fees. Others pass these banking costs on to the payor as a convenience fee. Practice Tips Some courts accept personal checks only under certain conditions: when a defendant makes payment by mail, when a defendant has not “bounced” checks before, or when the clerk calls the bank to verify the availability of funds and put a hold on the funds. If a court wants to increase the number of payments by mail, court leaders may want to persuade law enforcement officers to give traffic offenders an envelope addressed to the clerk along with the citation. Some courts use a distinctively colored, selfaddressed envelope to facilitate handling in the court, National Center for State Courts
others have designed a traffic citation incorporated into an envelope. Almost all courts allow installment payments for fines based on a local threshold. However, unless the clerk’s software accommodates such payments, installments can be a significant burden for staff. Successful courts collect the following information before allowing installment payments: Social Security number, work address and phone, payday, address and phone of parents and other relatives in the area, and personal references to verify. Unless the fine is large, collection is most likely within 60 days of adjudication, after which the defendant’s sense of urgency diminishes rapidly. Prompt followup is essential. Some defendants also change addresses frequently and require more effort to locate if the court does not move quickly. Most courts reported that the threat of jail via a bench warrant is an important incentive for many delinquent defendants. The capacity to raise money seems to increase substantially when a defendant is in custody. A few courts also report that the threat of credit reporting is effective, whether or not it actually is carried out. In some jurisdictions, the threat of a driver’s license suspension is an effective way to encourage fine payment; in other jurisdictions, the threat and even the suspension does little to affect fine payments. As we have said previously, courts must look at what is effective and suits the court’s philosophy, personnel, and staff limits. One or two collection programs we are aware of require defendants seeking an extension of time to pay to provide proof that they have made efforts to secure a loan and have been actively seeking employment. One collector even suggests holding a garage sale or eliminating cable television service to raise money. Good collectors are aware of “flush-money” times of the year, such as the month preceding Christmas and income-tax-refund season, and time collection incentives to coincide with these periods.
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2.6
Consider Forming a Specialized Collection Unit
Once the court and other justice agencies have agreed on goals and procedures, staff must carry out the daily work. In some jurisdictions clerk’s office staff may feel they are too busy to take on collection efforts or feel uncomfortable in the role of “collection agent.” For these reasons, formation of a judicial enforcement or collection unit is an increasingly popular alternative. Having a specialized staff ensures that adequate time will be devoted to collections and that collection staff have the inclination and experience to handle a stressful caseload. The few systems that have done cost/ benefit analysis of their collection programs report impressive returns. Colorado’s collection investigator program, for example, reported collecting eight to ten dollars for every dollar spent. Experience and training can acclimate most court staff to their collection tasks (see “Education and Training” section). Even if there is a specialized collections unit, all staff members need to convey the expectation that payment is expected, and be willing to encourage payment while acknowledging that some will need to pay as circumstances allow. As in any area, these tasks will be seen as more valuable if they are recognized as important by court leaders and competent performance is acknowledged. The court must identify, train, and encourage those staff members who truly enjoy the challenge of collections, but also encourage all staff to create the expectation of payment.
sector collections, while others without previous experience found they were able to motivate people and enjoyed doing so. Some judges delegate authority to collection officers, including the authority to revise payment schedules without court approval and the authority to initiate wagegarnishment and contempt proceedings. Please See Chapter 6, “In-House Collection Unit,” for further information. If hiring a collection officer is not an option, assigning collection activities to a single member of the clerical staff has several advantages. By having one staff member in charge of the collections activities, it helps ensure that there is consistency in processing extension requests and delinquent accounts. It is important that the individual handling collections has the temperament to work well with an often difficult group of individuals. In some jurisdictions the probation department, rather than the courts, manages collections. Given their authority to punish a defendant who fails to comply with probation terms, probation staff can be highly successful in this area. Some probation departments, as a matter of policy, place equal emphasis on financial and behavioral compliance. However, some probation departments emphasize behavioral changes and compliance with nonfinancial conditions of probation over compliance with financial conditions. In such an environment, dedicating one individual to enforcing financial obligations only can relieve probation officers of an unpleasant task seemingly incompatible with “more important” compliance.
Practice Tips If a court decides to pursue an in-house collection unit, court leaders can advertise internally and externally for collection-oriented staff willing to accept the challenge. These positions can be full- or part-time (whatever the court can budget). Some successful collection officers have worked in private- 26 -
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
2.7
Provide Education and Training
Once court and justice agency leaders make the decision to pursue collections more aggressively, they must provide education and training for staff. If the court atmosphere is to signal expectations of payment, then all staff will need to convey that expectation. Additionally, the court will need policies in place that provide procedural fairness to all defendants and ensure that practices are understood and consistently followed.
elicit other information from defendants at times of contact, especially information pertaining to employment or financial changes that may have occurred since the defendant last visited the court. Most counter staff have enthusiastically agreed to these duties and enjoy being part of the collection team. In addition to counter staff, the head of collections has recognized the importance of making collection of fines and fees a full-court effort. Staff in many areas including the civil department, have been trained to watch for defendants with outstanding fines and to relay potentially useful information to collections.
Practice Tips Developing practices, policy guidelines, and training can be easier if courts draw on some excellent resources that are available. The National Association for Court Management’s Trial Court Financial Management Guide contains a section on “Administering Collection of Fines, Fees and Costs.”2 In addition to raising numerous policy issues and providing many forms, procedures, and statutory examples, it contains a bibliography of the literature on collection of fines and fees. The National Center for State Courts’ Institute for Court Management also offers online and in-person courses on revenue enhancement and managing court financial resources. The National Center for State Courts Knowledge and Information Service also can provide bibliographic materials.3 Workshops and training materials may be available from private industry. One collection unit conducts regular meetings with counter staff to continually involve them in the process, a concept that all collection operations may consider. Counter staff have been trained to ask for and verify addresses every time a defendant makes a payment. They are encouraged to develop friendly relations with account holders and to attempt to
2 Section 30.70. The Trial Court Financial Management Guide is available in loose-leaf form by subscription from the National Center for State Courts. 3 NCSC’s Knowledge and Information Services www.ncsc.org National Center for State Courts
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
2.8
Establish Accountability: Control the Collection Inventory
Large amounts of unpaid fines and fees can create a political and public-relations problem for a court. The professionalization of court management and the continuing demand that public institutions operate in a more “businesslike” manner have also spurred interest in accountability for unpaid fines and fees owed to courts. Funding agencies and legislatures may look to courts to contribute toward financing their own operations, although it is widely accepted that courts are not, and can hardly be, selfsupporting. City councils, more so than countygoverning boards or legislatures, tend to view fines and fees as a revenue stream they can tap to finance government operations.
reported difficulties with funding authorities, who perceived a pool of unpaid fines as indication of a court system that isn’t “doing its job.” Regardless of whether these attacks are motivated by the public’s right to know or political aims, courts are accountable for the efficiency of their operations. There can be a number of reasons why outstanding fines and fees may have been on the books for a long period of time: • •
•
Many courts do not have a write-off procedure for uncollectible fines and fees. In some courts, the transition from a manual to computerized system created a gap in enforcement when accounts receivable were not migrated to the computer system. Some courts have had periods when staff size was too limited to carry out collections or when collection was not given high priority. Fine payment obligations may have expired upon termination of probation, an individual sentenced to pay a fine may be serving a lengthy period of incarceration, or most commonly, the court simply may not be able to locate a defendant.
The most visible means of demonstrating accountability is developing collection procedures with mechanisms for measuring success. Good programs also have an established “write-off procedure”; however, to eliminate uncollectible accounts, ensuring that the amounts shown as outstanding include only funds that realistically may be collected. Reporting on and managing the outstanding collections inventory helps courts establish their accountability, and develop realistic expectations.
•
Some outstanding fines are uncollectible in any court, although the amount is affected by the court’s collection practices. But there is always a group that cannot or will not pay, whatever sanction is applied. Unless steps are taken to identify a reasonable level of uncollectible accounts suitable for write off after appropriate time and effort has been expended, a court will have superficially large amounts of uncollected fines and fees. Dealing directly with the problem and not trying to hide it, is the best way to enhance accountability and public confidence.
Practice Tips
Some courts have become the target of public criticism after media “exposure” of large amounts of outstanding fines, fees, and restitution. Other courts
As a practical matter, many of these fines are uncollectible, despite the court’s best efforts. No useful purpose is served by keeping uncollectible accounts receivable on the books.
Section 13.2 in this handbook, “Sample Program 2: Reducing a Backlog of Accounts Receivables,” provides some suggestions for reducing case inventories. Writing Off Uncollectible Accounts for Receivables Inventory Control The amount of outstanding accounts receivable can be a politically sensitive issue, and the court should develop a process for separating active and inactive cases for reporting purposes.
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A court should be ready to consider the effect of bankruptcy proceedings on an alleged discharge of court costs, fees, and fines:
Inactive cases are those that have undergone the full collection process without success, including service of a warrant or license-suspension notice. They are not written off because the warrant or suspension may eventually generate a payment. Formal write-off procedures for uncollectible accounts should be established. Possible criteria for writing off some uncollectible accounts include the following from Michigan’s collection policies:
A.
Michigan’s policy for debts to be eligible for discharge, which is a judicial action to forgive a debt, uses the following criteria, where a court administrator identifies such debts and an assigned judge discharges them:4 The debt is discharged by order of a bankruptcy court. • The debtor is deceased and the estate is closed. • The debt is uncollectible by operation of law. This policy also establishes criteria for inactivating uncollectible debts, which is an administrative procedure to remove a debt from the list of amounts the court can expect to collect, but does not constitute forgiveness of the debt; inactive debts are still payable by the debtor. The court must be able to accept payment for all inactive debts, and return a debt to active status to resume appropriate collection efforts. •
B.
4
•
Court-ordered fines, fees, and costs have never been considered a debt dischargeable in a Chapter 7 bankruptcy proceeding.5
•
If a Chapter 13 bankruptcy case is commenced on or after October 22, 1994, then court-ordered fines, fees, and costs are considered debts that cannot be discharged in a bankruptcy proceeding, and a court can fully enforce its orders against a defendant.6
•
Even if a defendant first files bankruptcy and is subsequently found guilty of an offense, a court can still order him to pay restitution for the same loss that had been discharged as a “debt.”7
A court may use the state’s record retention schedule to write off uncollectible accounts. Although an account most likely is, from a practical point of view, uncollectible long before the purge date for the court record, using the state’s record retention schedule is a practical fall-back procedure to handle old accounts.
See Michigan Trial Court Collections Model Debt Inactivation Policy, http://courts.michigan.gov/scao/services/collections/Policies/ SCAOModelPolicies/ModelDebtInactivationPolicy.pdf. 5 See Kelly v. Robinson, 107 S. Ct. 353 (1986). 6 See 11 U.S.C. Section 1328 (a). 7 See Cabla v. State, 974 S. W. 2d 927 (Tex. App. – Houston [14th Dist.], 1998). National Center for State Courts
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Time limits on warrants can also be useful in managing the collections inventory. For warrants issued on an initial failure to appear, some courts set a limit of two years, for example, for a warrant to be outstanding, on the theory that an officer would be unable to remember the facts adequately to testify at trial beyond that time. The court may find it useful to issue time-limited warrants for minor offenses. Doing so will ensure that a next event date, a hearing on dismissal or renewal of the warrant, is entered in the court’s information system which will automatically trigger a review and an action on the case. Documenting the reasons or the procedure for converting accounts to an inactive status may not be a sensitive issue for a court but, if ever questioned, the court should be able to articulate its rationale. Demonstrating accountability means both (1) having processes for collecting fines and fees owed, and (2) clarifying through reporting and policy what is actually owed to the court.
2.9
Consider the Cost of Collections
As with other public entities, many courts and other justice system agencies may not have had to pay strict attention to the bottom line in their operations. For the majority of courts, this has changed in recent years as governmental dollars have grown tighter, and taxpayers and funding authorities have demanded more-efficient and lessexpensive public programs. Courts, therefore, must consider not only how much is being collected, but also how much it costs to generate that revenue. Practice Tips A court needs to consider a number of issues in developing a collection strategy, and one is cost versus return. For example, what is the total and per-dollar cost of collecting fines and fees by various methods (staff, postage, service, and collection agency fees, etc.) and the likely return for investing greater resources? Will a less-resource-intensive process generate similar returns? Can technology enhancements eliminate labor-intensive and lessefficient manual processes? At what point does the cost of collecting a group of delinquent fines surpass the likely return? Please see Section 3.5 “Acceptance of Payments Remotely” for examples of technology and services to reduce the cost of collections. Cost versus Benefits in Practice A few courts rely almost entirely on personal service of delinquency notices on defendants who fail to make timely payment. They assert that their method is the best available because it generates a good return (they claim about a 70 percent collection rate overall). However, the costs of the process are substantial. Some law enforcement officers may need to be dedicated exclusively to serving notices or warrants. Multiple notices or attempts to locate may be required in many cases before payment is made, and the cost of this activity must be weighed against the benefits derived.
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Technique versus Cost: Coordinated Warrant Sweeps Planned warrant “sweeps” were reported to be a successful strategy by several courts. Each court coordinated with local law enforcement and corrections officials to plan a mass effort to arrest defendants with outstanding fines. Local media were notified to publicize the sweep. Word of the sweep reached the street quickly. The result was long lines at the courthouse of defendants waiting to pay fines before they could be arrested.
The best programs use a mixture of strategies. To keep costs down, the best programs start with relatively inexpensive, computer-generated delinquency notices. Defendants on a formal payment plan may receive a telephone call from the collection unit. Initial written notices or telephone calls clearly describe the subsequent steps the court will take if payment is not made. If the defendant fails to make payment, the court then undertakes more-coercive, and more-expensive, efforts to force compliance. These usually include license suspension (for traffic offenses), issuance of a warrant, credit reporting, or civil enforcement, such as wage garnishment or property liens.
In 2008, the Lehigh County, Pennsylvania Adult Probation Department and the Lehigh County Bureau of Criminal Collections reported that they conduct quarterly what is known locally as the Delinquent Accounts Re-Negotiation (DARN) Roundup. Supervisory staff in each office meets approximately six weeks in advance of the scheduled date and identify offenders on active supervision who are more than 30 days delinquent on restitution and court costs.
Service of warrants is particularly problematic in most jurisdictions. While the possibility of going to jail can be an effective threat, it is expensive to serve warrants and incarcerate defendants. Most courts rely on traffic stops or subsequent arrests because they do not have enough staff to locate and serve defendants who have unpaid fines. In many localities, jail space is limited or unavailable immediately so the defendant often is immediately released on recognizance or on limited bond and given a new date to appear. It’s a last resort. The defendant often fails once again to appear or pay, and the process starts over, unless the bond amount equaled the obligation due. State law often permits the defendant to voluntarily assign the bond amount to the fine obligation or forfeit the bond upon subsequent failure to appear.
Delinquent offenders are instructed by mail service to report to the Adult Probation Department’s large conference room on the scheduled date by their probation officer. The letter also indicates that full payment will result in “consideration” for early termination from supervision. Ten offenders per hour are scheduled for joint meetings with an adult probation officer and collections hearing officer, who strictly enforce payment agreements on the roundup date. Payment of arrearages is expected and full payment to a zero balance is desirable; however, any amount is accepted.
After careful consideration, some courts have determined that serving warrants can be an important and cost-justified function, despite the related costs. One large urban court employs six bailiffs who serve warrants and provide courtroom security. They are uniformed and drive officiallooking cars when they serve process and warrants. The bailiffs do not actually arrest defendants; it is too expensive, and there is no room at the jail. However, the court has found that simply being notified of a warrant or capias in person is enough to prompt most people to pay an outstanding fine.
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Practice Tips
2.10 Pursue Interagency/Inter-jurisdictional Cooperation
Although every court’s collection system has statutory and local rules governing its operation, the roles of clerk, judge, prosecutor, law enforcement, and probation may not be explicitly delineated in practice. Where responsibility for fine collections is not clearly assigned to a single entity, generally collections operations are less efficient. Leadership and common understanding and expectations are needed among the justice system operations responsible for collecting fines and fees so that the fine collection process does not flounder. Other governmental agencies often play a critical role in contributing to the success or failure of a fine collection program, and collection administrators in the better programs have carefully cultivated their cooperation. Major changes in the process proposed by the court are discussed first with other affected agencies. Court representatives meet regularly with the prosecutor, law enforcement, corrections, the motor vehicle registry and, sometimes, the public defender and private bar to discuss mechanisms for system-wide improvement. Other government agencies may also be valuable information sources. Depending on state law and government structure, courts have found that state employment offices, state- and local-administered utilities, other courts, and law enforcement can be very helpful in providing information needed to locate delinquent defendants.
One court sponsors a monthly interagency “breakfast club,” a policy board composed of police, prosecutors, the court, and information services, to discuss issues of mutual interest, (including collection of fines and fees), problems, and opportunities. Another court has designed its collection strategy with the ongoing assistance of a task force of involved agencies. However, in a surprising number of courts, justice system participants involved in court collection do not regularly meet. As court and justice agency information systems evolve to similar hardware and software platforms and communication and data exchanges between agencies becomes more feasible, ongoing interagency dialogue has become even more necessary. Through thoughtful system and interface design, information interchanges can be enhanced and duplicative data-entry activities often can be reduced or eliminated, saving on time and resources for all involved. Conclusion While many ideas discussed in this chapter are expanded upon in later chapters, Table 7 provides a summary of the best practice areas and specific key practices we recommend be considered. Table 7 also indicates the later chapters that take up a topic in more detail. The checklist at the far right provides an easy way for a reader to monitor practices already in place, those that should receive further scrutiny, and those that might not be applicable in their situation.
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Table 7
Best Practices and Local Practices Checklist Checklist
Best Practice Area
Specific Practices to Consider
2.1
Create Expectations through the Fine Collection Atmosphere
Judge communicates expectations from the bench Signs in court or hallways, etc. reinforce expectations Document practices to ensure procedural fairness Communicate follow-up intent
2.2
Practice Leadership and Commitment
2.3
Set Collection and Information Goals
Involve other participants, i.e., clerks, law enforcement officers, warrant servers, prosecutors Seek the backing of the majority of judicial officers Communicate expectations from the bench to all system participants Set time-related goals (30 days collections, 90 days, etc.) Set amount goals
See Performance Measures in Chapter 11
Plan ways to monitor progress
2.4
Use a Systematic Communication Plan with Defendants
2.5
Establish Follow-Up Processes For more detail, see Chapter 3 and Chapter 5
Provide written notice of defendants’ next due date, and amounts due (see Chapter 5) Communicate consistently, at every step, and execute communication well Be sure that non-English speakers or poor readers know what is expected Decide how to follow up with unpaid amounts: Payment plans Progressive escalation of written notices of amounts due Suspend driver’s license Providing alternative ways defendants can pay, including: Internet, either court or external entity site Mail (direct to court or via bank lock box) In-person (personal checks, credit cards, prepaid cards, electronic checks)
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Already Do This
Consider This in Action Plan
Not Applicable
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Table 7 (Continued)
Best Practices and Local Practices Checklist
Best Practice Area
Specific Practices to Consider
Checklist Already Do This
Consider This in Action Plan
Not Applicable
Telephone voice response system
More coercive enforcement measures are discussed in full in Chapter 8
In-house or external collection personnel Accept payments at checkcashing locations, with fee paid by defendant Show-cause docket Contempt citations Bench warrant or threat of a warrant Threat to notify credit agencies Time backlogged payment sweeps to coincide with “flush” money periods
See Payment Alternatives in Chapter 4
Consider alternative “payments”
2.6
Consider Forming a Specialized Collections Unit See In-House Collection Unit in Chapter 6
Handle the “too busy” and “not comfortable” staff Develop specialized collections staff if needed and possible
2.7
Provide Education and Training See Routine Enforcement Techniques in Chapter 5 See In-House Collection Unit in Chapter 6
2.8
Establish Accountability: Control the Collections Inventory See Sample Program in Chapter 13
2.9
Manage the Cost of Collections See Calculating Cost of Collections in Chapter 11 See Legislative Issues in Chapter 12
2.10
Pursue Interagency/ Inter-jurisdictional Cooperation See the role of probation/parole departments in Chapter 9
Develop policies and procedures that support consistent and fair collections practices Engage counter staff in learning to interact at collections opportunities Develop write-off procedures ensuring that truly uncollectible accounts do not remain in the collections inventory Determine which collections practices provide the most return for the least outlay Decide which collections practices are not practical in the local situation Cultivate cooperation with other agencies whose responsibilities affect collections success - 34 -
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Chapter 3 METHODS OF PAYMENT AND COMPLIANCE ENFORCEMENT 3.1 Prepayment of Fines/Payment by Mail
In many courts, some percentage of guilty pleas and fine payments are mailed in by defendants. Accepting mailed payments shows that the court wants to make it as easy as possible to comply. 1
• • •
•
Issues to Guide Policymaking How, if at all, is prepayment of fines and fees encouraged? How is the method of prepayment communicated? Is it simple and clear? What is the prepayment deadline, and is it enforced to reduce the rush of last-minute payments? Are partial prepayments accepted by mail? If so, what communication should there be to obtain further payments?
Practice Tips
One urban court speeds up receipt of payments substantially by using a post office box; payments are often received the day after they are mailed. A court should enter citation data as soon as possible, or allow counter clerks to initiate a “shell” case to accept payments when the citation is not yet entered, to accept payment when it is offered and not force a defendant to try again later. Most courts accept payment in person up to and including the appearance date. Many courts also accept mailed payments after the appearance date if timely postmarked, or allow a grace period before issuance of a license suspension or warrant, to maximize payment opportunities before proceeding with sanctions. One court refuses and returns all mailed payments that do not exactly match the fine due. Most courts, however, have decided that the better policy is to retain the funds and respond with either a demand letter for the balance due or a refund of the overage. For administrative convenience, some courts have established a minimal level (a few dollars) of overpayment or underpayment that will be accepted without adjustment. Staff members are instructed to deposit the funds and show the account satisfied without further action if the payment falls within the range established by court leaders. For overpayments, a refund is sent only if the defendant requests one.
To increase the number of payments by mail, several courts have persuaded law enforcement officers to give traffic offenders an envelope addressed to the clerk along with the citation or a schedule of fine amounts by offense. A distinctive preaddressed envelope facilitates the handling of payments and provides traffic defendants with written payment information at the time of the stop, thus substantially reducing the number of inquiry calls to the court. Law enforcement also can hand out information on how to apply for “traffic school,” if appropriate.
1
Most courts accept payment by personal check, and some that do not accept checks at the courthouse will accept a mailed check rather than turn away money. National Center for State Courts
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3.2 In-Person Payments
As an aspect of growing interest in enhanced customer service, many courts have reviewed the process for fine payments and made efforts to improve public access. In many urban centers, in particular, the court is no longer close to major population centers. Courthouses are overcrowded and parking is difficult. Limited hours may make a trip to the court inconvenient for working individuals. For these and other reasons, a number of courts have begun to experiment with alternative payment methods and locations. Issues to Guide Policymaking How can the court modify its courthouse operations to enhance public access for inperson fine payments through extended hours, kiosks, or drop boxes? • Should the policy be to discourage payments at the court to reduce traffic at the courthouse, through remote payment alternatives via Internet, telephone voiceresponse system, or commercial moneytransfer agents? •
A few courts offer a drop box for payments. Although this has the drawback of not giving a payer a receipt, payments by check or money order are self-receipting. One court has a drive-up window. A few courts offer payment through an automatic teller machine (ATM) or a kiosk; this solution involves significant development and equipment costs, although the expense will decrease as the hardware and software are more widely used. Another court has an arrangement with a grocery chain to accept and forward payments at store locations (similar to more-common utility-billpayment outlets). Some courts accept payments through Western Union. They feel that the arrangement is used primarily by defendants who are uncomfortable entering the courthouse, either because they don’t understand the legal process or are concerned that other legal problems may be discovered if they appear in person.
Practice Tips Some large urban courts offer very good service to the public by keeping a window open to accept payments 24 hours each day. Night staff also prepare dockets for the next day and perform other tasks during the evening hours. A few courts have installed voice-response systems connected to their computer systems which permit people, using a touch-tone telephone, to enter a citation number, find out the amount of the fine and the court date, and even postpone a court date once. This kind of system is available 24 hours a day and saves considerable staff time.
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Practice Tips 3.3 Acceptance of Personal Checks
A majority of courts accept personal checks under some circumstances. The philosophy of these courts is to make payment as easy as possible for defendants. Most reported that bad checks are not a significant problem. Defendants are ordered to resubmit payment by cash or money order, along with a processing fee (usually about $20). If the defendant fails to pay as ordered, the case is processed as any other delinquent payment.
•
• •
•
•
Issues to Guide Policymaking Should the court accept personal checks and, if not, is that consistent with a policy to make payment as convenient as possible for a defendant? Should availability of funds be verified before accepting personal checks? Should the court accept electronic checks, either with bank account number and routing number, or conversion of information from a paper check into an electronic payment from the person’s bank account to be processed through the ACH Electronic Payments Association? What administrative procedures exist for bounced checks? Can the court maintain a list of defendants who have “bounced” checks and refuse to accept future payments by check? Can the court legally impose a fee or service charge for a nonsufficient funds (NSF) check (either a flat amount or a percentage)? If a fee is imposed, is it adequate to cover the costs of processing a bad check?
National Center for State Courts
In one jurisdiction, courts do not accept personal checks because an archaic state law imposes personal liability on the clerk for the full amount of any bad check accepted by the court. This is probably a highly unusual provision, but any court preparing to change its policy regarding check acceptance should confirm that the court will not incur any penalty and that the costs of processing bad checks can be passed on to the defendant. Paper and electronic checks take several days for the funds to clear a person’s bank account, and checks may “bounce” for insufficient funds or the account has been closed either inadvertently or fraudulently. A court should post notice of a fee charged for returned checks.
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Practice Tips 3.4 Payment by Credit Card
This section was written by Amy Johnson, FARE/DSO Business Analyst (Fines/Fees and Restitution Enforcement), Arizona Supreme Court.
A growing number of courts accept credit cards for face-to-face payments. Many states have laws governing the acceptance of credit cards by public agencies. The primary issue raised by credit-card payments is who is to cover the transaction fee related to card use. Different strategies have been developed in the courts. State law and merchant agreements generally govern whether the fee charged by a financial institution for handling credit transactions (a) can be passed on to the customer (defendant) or (b) must be absorbed by the court as a cost of doing business.2 A third option available to some of the larger systems is to have the bank absorb the costs as part of the court’s banking package.
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Issues to Guide Policymaking Can the court accept credit-cards under state law? Who bears the expense of processing credit card payments? Is there legal authority for charging defendants with the cost of credit-card payment processing, or will the court or the vendor absorb the cost? Is it statutory or can the chief judge issue an administrative order? Can the court’s banking institution be convinced to absorb all or part of the transaction costs? Should the court accept payments with prepaid cards (i.e., a stored value card with monetary value on the card, not in an externally recorded account)?
In Arizona the practice of accepting credit-card payments has increased greatly to accommodate defendants by offering a convenient way to pay amounts due. There are several courts that set up and maintain their own credit-card machines to accept payments. This has proven very beneficial for those courts that are rural. One of the complaints heard is that the merchant account fees assessed to the case for this convenience charges up to 6% of each payment received, which defendants and some court staff alike feel is much too high. Notices are mailed to defendant describing the Arizona Fines/Fees and Restitution Enhancement (FARE) program and providing Web/IVR payment options. These notices are mailed for pre- and postdisposition cases as well, which may help encourage the defendant to make a payment even before the case becomes delinquent. Credit card fees are absorbed by our vendor on backend delinquency collections. For other transactions through FARE, the cost is borne by the FARE program. The Web/IVR payment option has helped to increase collections in all areas, but especially in rural areas where citations are issued to drivers who are just “passing through.” Some courts use a third-party vendor to process credit-card payments, which can be made online or by phone 24 hours a day, seven days a week. There are no merchant account fees paid by the court; instead, the payer pays a transaction fee directly to the vendor. The vendor provides flyers that list the phone number, Web site, and transaction fees. These flyers can be posted at payment windows, provided by law enforcement when traffic citations are issued, and mailed with notices to the defendant.
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3.5 Acceptance of Payments Remotely
Allowing defendants to pay their financial obligations without going to the courthouse is beneficial for several reasons. As with software system interfaces described in Section 10.3, an automated interface with a payment gateway avoids data entry from paper and the issues associated with it: resource expense of handling paper and performing data entry, delay in processing, and errors in data entry. The cost per financial transaction for remote payments decreases significantly compared to taking payments across the counter.3 Interactive Voice Response (IVR) IVR is a technology that allows a computer to detect telephone voice and keypad inputs. The person calling can enter citation number, credit-card number, and answers to “Yes/No” questions using the telephone keypad or verbally. IVR systems can respond with prerecorded or dynamically generated audio responses to direct users on how to proceed, including verifying a citation number and entering a credit-card number for payment. Defendants can make payments by telephone 24/7, and the public is accustomed to this kind of convenience. An automated interface matching payments and accounts is highly desirable. A side benefit is that IVR systems allow callers to get needed information 24 hours a day and obtain data relatively anonymously. They can also be used as a front end to individual staff or call centers to answer many calls without requiring the assistance of customer service personnel. In such cases, IVR keeps them from constantly having to answer the same simple questions. A properly designed IVR application can respond to a caller’s needs promptly
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and with a minimum of complexity. Badly designed IVRs (like many help-desk call-center systems) have resulted in knee-jerk criticism for the technology as being unhelpful, difficult to use, frustrating, and annoying. Some callers object to responding to any automated system and prefer speaking with a human respondent. Internet Payment Most courts contract with a credit-card processor (payment gateway) to provide Internet payment processing. A county or state may already contract with a credit-card processor, so a court may be able to piggyback onto an existing contract. An Internet payment usually follows the following sequence of events: 1. The defendant enters identifying information on a secure court Web page with personal information, including a credit-card number, encrypted so it cannot be intercepted and read by a third party. 2. The credit-card processor checks the information it received about the payment to ensure it has all the information it needs to continue processing the transaction. It then determines which company manages the defendant’s credit card and transmits a request for the card to be charged. 3. The defendant’s credit-card company validates the card and the account. If everything checks out correctly and the credit card is clear for purchases, the credit-card company sends an acknowledgement back to the card processor that the amount requested can be transferred. If the credit-card company denies the charge it sends a code back to the credit card processor indicating what the problem was. 4. The credit-card processor now tells the case management system whether or not the transaction was successful, and the Web site then tells the defendant whether or not the
In 2008 the Orange County (Florida) Clerk of Court reported that the cost of an in-person financial transaction was $1.88. By contrast, the cost of an IVR payment was $0.43; the cost of an internet payment was $0.13; payment through Western Union was $0; payment through a local commercial payment agent (AMSCOT) was $0.43; and payment through a lockbox was $0.43. National Center for State Courts - 39 -
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
payment transaction was complete, with a confirmation number. The credit-card processor initiates a funds transfer to the court’s bank account for deposit. 5. A payment report is mailed daily to the court listing payments made (for the court to use to receipt payments into the case management system if there is no automated interface), broken down by amount received for each case, type of card used, case number the payment was made on, and total amount received.
of the ticket or summons) and deposit information to the court for further processing. An automated interface matching payments and accounts is highly desirable.
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Issues to Guide Policymaking Assuming the cost of conducting face-to-face transactions is known, is it cost-effective to receive and process remote payments? Is an automated interface feasible, and at what up-front cost?
The court accounting staff then reconciles payments in the bank account with the list of payments from the credit card processor. Defendants can make Internet payments 24/7, and the public is accustomed to this kind of convenience. An automated interface matching payments and accounts is highly desirable. A side benefit is that Internet payment systems allow callers to get needed information 24 hours a day and obtain data relatively anonymously. Commercial Money-Transfer Agents The court may contract with money-transfer agents that operate nationally (like Western Union or MoneyGram) or locally (like check-cashing businesses). Defendants pay a transaction fee based on total dollar amount, or the court may absorb the fee. Locally based money-transfer agents may offer a variety of services to the consumer, including check cashing, utility payments, payday advance, and money orders. The benefit of this approach is providing a larger number of off-site payment locations for defendants to pay their court obligations. An automated interface matching payments and accounts is highly desirable. Lockbox A lockbox is an arrangement in which defendants are given a post office box to mail payments, and a local financial institution receives, receipts, and immediately deposits a court’s mailed-in payments. No fee is assessed to the defendant. Following receipt of the funds, the bank forwards the paperwork sent with the payment (typically a copy - 40 -
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
show-cause hearing, additional fine, or driver’s license suspension), and should notice be sent before additional penalties are imposed? • Are terms realistic and not overly lenient?
3.6 Partial-Payment, Installment, and Deferred Payment Plans Most courts accept partial, installment, and deferred payments, either through formal payment plans, or when the judge in the courtroom makes a verbal order (i.e.“Pay by 5:00 PM on Friday”).
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Issues to Guide Policymaking Is there an established practice or written guidelines for granting a payment plan to defendants? Is there a minimum amount for fines and fees that does not qualify for a payment plan, and are defendants expected to be able to pay? If the judge agrees to a payment plan, or delegates authority for this decision to staff, is there a procedure if the defendant fails to follow through? Are forms designed for this purpose? Is the defendant required to provide financial and personal information and sign a payment agreement before leaving the courthouse? Are payment dates and enforcement procedures clearly specified in the payment agreement? What is the potential effect on clerical and administrative personnel in managing payment plans? If a defendant requests a payment plan for an additional case, should it be added to an existing plan or should it become another payment plan to take effect after the first one is completed? What happens when a payment is missed? Do staff members take prompt action in response to missed payments? What grace period, if any, is allowed before an installment becomes delinquent? Should any be allowed? Does the payment agreement provide that notice be sent before the court takes action on the delinquency? Are there additional penalties for failure to make installment payments (for example,
Practice Tips Processing partial and installment payments can be a significant burden upon clerk’s office staff, particularly in courts with manual accounting and case-tracking systems or cumbersome automated systems. The processing of partial payments becomes particularly complicated when fines and costs must be collected and disbursed to various agencies, as is the case in most states. The alternative is to permit only full payments, a practice adopted by a number of limited jurisdiction courts for fines in the $100 to $200 range. These courts report that payment rates have not suffered as a result of refusing partial or deferred payments of relatively small fines. The administrative savings in not carrying payment plans for such cases further justifies the decision. Despite the administrative burden imposed by partial payments, the majority of courts accept them, primarily through terms of a payment plan. This conforms to a policy that it is always better to have some payment on an account than none. Even courts with relatively unsophisticated information systems have devised methods for accounting for partial payments. Some accept the installments, but wait to disburse funds until the account is fully paid.4 Many courts have established a priority for disbursements, i.e., the first funds received are applied to restitution, a victim/witness fund, or court costs. When the first priority disbursement is satisfied, funds are applied to the next disbursement in the hierarchy. When a clerk’s office compiles its list of desired improvements to a computer system, the ability to handle partial payments automatically through a payment plan deserves relatively high priority to conserve labor resources and ensure accurate accounting.
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This practice produces questionable results if no further payment is ever made. The court’s financial module should be able to track such amounts and disburse them periodically or at such time as it appears that no additional payments are forthcoming. National Center for State Courts
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Practice Tips
Chapter 4 PAYMENT ALTERNATIVES AND CAPACITY TO PAY Every court has alternatives to payment to accommodate indigent defendants or others as permitted by statute.
4.1 Community Service in Lieu of Fine Payment
Every court permits indigent defendants to substitute community service for payment of a fine. Typically, community-service programs are administered through the jurisdiction’s probation department, while the work itself is overseen by an outside governmental or nonprofit agency. Some smaller courts do not have a formal communityservice program. Instead, defendants make their own arrangements for service and provide the court with proof that the required hours were completed. A standard hourly rate, usually minimum wage, is credited for the service. The fine is “paid” when the value of the number of hours worked equals the amount of the fine.
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Issues to Guide Policymaking Is community service a realistic alternative to a fine? How is eligibility verified? Is the time of actual service verified? How is it verified? What happens if service is not successfully completed? How are dollars of a fine and costs translated into hours of service (at what rate is service credited)? Which assessments can community service be performed in lieu of and which assessments must be paid?
Challenges to offering community service include the proclivity of offenders not reporting to work when needed, and their need for constant supervision. The jurisdiction can operate its own community service program, or outsource labor to non-profit agencies and organizations. A court should consider whether and how to offer community service to offenders convicted of serious offenses, including sex-related assault, burglary, habitual drug use, and violent crimes. Common complaints regarding community-service administration arise in many courts: • problems of insufficient staff to assign and supervise workers. • difficulty in finding agencies willing to accept community-service workers. • lack of reporting of (and slow response to) noncompliance with community-service orders. Exposure to liability for community service workers also is an issue for many collection programs. Potential liability for the courts or supervising agency depends on state law. A few states have specific statutes granting immunity to the court and the entity providing the community service assignment. Other jurisdictions charge program participants a fee, which pays a liability insurance premium covering the participating entities. Still in other jurisdictions, community service workers are covered under the workers’ compensation insurance policy, prompting some judges to order into community service only healthy defendants who are unlikely to file claims under the insurance policy. If a jurisdiction operates its own community service program, they should provide a short orientation about what’s expected, when the defendant should report to work, and the work rules. Defendants get two chances to do a job correctly, and then he or she is sent back to the judge.
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Community-service programs provide locations, dates, and times that defendants can perform community-service hours, and rules of conduct. Courts have the option to set a rule to disqualify defendants from working that day, if they show up late. The defendant needs to feel like he or she is reporting to a paying employer, because it sets a level of expectation. Multiple times, shifts, and locations provide more options. Some weekends are available. Proper recordkeeping is critical. A sign-in sheet should include dates, times, and referring agency. Software is needed to keep track of hours. Staff must supervise community-services workers at all times, list areas that are allowed to work in, and duties they are allowed to perform.
4.2 Time Served in Lieu of Fine Payment
One of the realities of fine collection is that after a defendant seeks and is given a chance to make payments, the defendant may willfully default and fail to appear or comply. The usual result is issuance of a warrant and eventual arrest, sometimes for unrelated reasons like new charges. The judge has a choice to continue to seek payment or subordinate the collection effort to new and sometimes more serious charges. For reasons of judicial economy, that the limited resources of the legal system or a given court should be conserved, the judge may view the entire circumstances of the defendant and offer the defendant cancellation or reduction of the amount due based on time served in jail.
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Issues to Guide Policymaking What is the daily cost of housing an inmate in the jail? Is there consensus among judges in the jurisdiction of the amount that should be credited for time served? Which assessments can jail time be served in lieu of payment and which assessments must be paid?
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
4.3 Traffic School
4.4 Assistance in Finding Jobs
Traffic school has been adopted by a number of jurisdictions. The claimed benefits of traffic schools include a reduced burden on the justice system because cases are delivered out of the formal court process, and the prevention of future violations by providing instruction in safe driving habits. Drivers electing traffic school rarely save any money; often, administrative fees and traffic school costs exceed the amount of the potential fine. However, they usually avoid the reporting of a violation to their insurance company and a related rise in premium, or the imposition of points.
In a few courts, the collection officer helps defendants find work to ensure that they can pay their fines. It is usually limited, informal assistance, but it can be effective in getting fines and fees paid. Practice Tips Although judges and collection staff are usually too busy to devote much time to helping defendants find a job, providing the telephone number of the local office of the state employment department or a day labor business may help a defendant obtain employment.
In addition to traffic schools, a few jurisdictions have started to experiment with similar remedial programs for defendants arrested on minor misdemeanor offenses. Issues to Guide Policymaking • Does state law allow diversion of traffic defendants through traffic school? • Can a local sponsor (community college or nonprofit organization) be found? • How are traffic schools evaluated for the quality and effectiveness of their programs? Practice Tips The National Safety Council accredits traffic schools nationwide. A local community college or a nonprofit organization such as Mothers Against Drunk Driving (MADD) may be enlisted to sponsor a traffic school.
4.5 Financial Counseling
In the spirit of problem-solving courts, a probation department or collection unit can seek to promote outcomes that will benefit not only the defendant, but the victim and society as well. Some defendants do not have the skills to budget and handle their money, so an agency can offer financial management counseling, with voluntary participation, operated like a consumer-creditcounseling service. Some agencies offer a monthly class with a financial adviser.
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Practice Tips
Chapter 5 ROUTINE ENFORCEMENT TECHNIQUES 5.1 Notice Before Initial Appearance
To provide offenders with the proper information before the initial court appearance and to increase the number of defendants who come to court prepared to pay in full any fine and fee assessed, a prehearing notice may be distributed by the arresting officer or mailed to the defendant or the defendant’s attorney of record. The notice should clearly and plainly tell the defendant when and where to appear; the amount or the range of the fine to be assessed on a finding of guilt; methods of payment accepted by the court; sanctions that will be imposed if the defendant fails to appear as ordered; and, if it is the court’s policy, that payment in full is required at the time of sentencing.
A number of courts found that their area law enforcement officers were against distributing notices at the time of arrest. They were concerned that including the amount of the fine, in particular, may cause some individuals to become violent. However, no problems of the sort were reported in jurisdictions using this practice. One court reported a substantial drop in pre-appearance telephone information requests after officers began distributing hearing and payment information with the citation. While notices often must include a lot of information, the court should ensure that the notices are in easy-to-read, non-legal language. Without attention to reading level and form design, forms may be difficult to comprehend for defendants who are unfamiliar with the legal system, have low literacy levels or limited ability to read English, or suffer from vision impairments. Notices can be difficult to read and can be intimidating, especially if all of the text is in capital letters, the printing is small, and/or if statutes are quoted in their stilted language.
Issues to Guide Policymaking Will a prehearing notice sufficiently increase payment of fines to justify the expense of the effort? • Is a computer system available to print the notices in a timely manner? • How can a notice distribution program be coordinated with local law enforcement and the citing officer? •
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Practice Tips 5.2 Actions Upon Nonpayment
The key to successful enforcement for nonpayment is quick and authoritative action in accordance with court guidelines.
A series of standardized actions should be specified for staff to follow when defendants fail to comply with payment plans or other court orders. The court should carry out the threatened steps promptly upon noncompliance. Examples of the actions taken upon default include the following: • •
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A telephone call to the defendant at work or at home by court staff A mailed demand notice warning of the sanctions to be applied if payment is not made (e.g., suspension of driver’s license, additional penalties, threat to report the obligation to credit-reporting agencies, issuance of warrant) Suspension or nonrenewal of driver’s license or vehicle registration, as permitted by state law Imposition of a late fee on outstanding fines and fees Releasing the account to a private collection agency Institution of contempt/show-cause proceedings Issuance of warrant, with setting of cash bond required for release Accrual of interest on delinquent fines and fees or restitution judgment Assignment or garnishment of wages Setoffs of state income tax refunds or gambling or lottery winnings Filing of a property lien, seizure of bank accounts, or impoundment of vehicle Electronically monitored home confinement
For traffic offenses, driver’s license suspension should routinely be used if permitted by statute. Most drivers will pay fines to keep their license in good standing. Notifying the defendant before suspending the driver’s license is an obvious step. Even if it is not required by statute, advance notification of the suspension probably encourages some defendants to pay before it occurs and offers the court another opportunity to warn of the full range of sanctions available. For defendants arrested on a warrant, “shock incarceration” (for perhaps 24 hours), in conjunction with efforts to get the defendant to raise the funds needed to pay the fine and fees may be effective. For many, jail is an unpleasant enough experience to obtain compliance. Most courts reported that the mere threat of jail following arrest on a warrant was enough to inspire many defendants to either pay their fines or post bond. After the notice of suspension is sent, the warrant is issued, or civil enforcement attempted (i.e., wage garnishment), some courts then release the account to a collection agency (discussed in the next section). Others continue collection efforts in-house, turning accounts over to a private agency only at a point when no payments have been made for a certain period or the court is unable to locate the defendant.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
5.3 Late Fees on Fines and Costs
5.4 Use of Credit Information Services
State law may allow the imposition of a flat penalty amount for failure to appear or for late payments, accrual of interest on fines or on costs, or both.
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Issues to Guide Policymaking Under state law or court rule, can a late fee be imposed? Can interest on fines, costs, or restitution accrue? Is the late fee appropriate? Is it high enough to encourage compliance? Is it so high that judges tend to waive the fee because they feel it is too great a penalty? How does interest accrue (flat percentage, sliding scale)? Are there times (such as when a fine, costs, or both are being paid in installment payments) when interest cannot accrue? Can the computer system calculate interest?
Practice Tips One court demonstrated the effectiveness of threatening to charge a late fee. The court’s policy had been to send a demand letter immediately after a defendant failed to appear or pay as ordered, stating that a late fee would be imposed if the account was not satisfied within 10 days. Court leadership decided to reduce staff time and costs by eliminating the warning letter, although they continued to impose the late fee. The result was an immediate increase in unpaid fines. The court quickly reinstated the warning, and compliance levels rose again to prior levels.
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Credit bureaus can provide information about defendants. Please see Section 11.1, “Obtaining Defendant Information for Collection Purposes”. Credit reporting also is a possible sanction for nonpayment, and the threat alone of reporting the obligation may increase the likelihood of payment. Many individuals purchase consumer goods on credit, and a threat to their credit ratings can be a strong incentive. Issues to Guide Policymaking • How much will credit reporting cost; will the returns justify the expense? • How difficult is credit reporting to manage administratively? Practice Tips A court should explore costs related to credit reporting of delinquent accounts. Credit reporting can be limited to cases in which a defendant is delinquent, although the court may consider reporting the outstanding obligation in all cases in which a defendant is paying a substantial fine over time. Doing so would be similar to commercial creditors reporting the amount of outstanding debts, even for current accounts, to warn others that granting further credit may be risky. If credit reporting is pursued by a court, a warning that negative credit reporting may result should be added to delinquency notices. A court can become a member of a credit bureau at a nominal annual cost. A few courts that include a statement in a demand letter that credit reporting is a “potential sanction” for nonpayment have discovered that the threat alone, even if not carried out, is highly effective. The warning seemed to work especially well with out-of-state defendants who had ignored prior threats of a warrant (presumably believing that as they had no plans to return to the jurisdiction, they were beyond the reach of a warrant).
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Credit reporting must be very carefully managed to ensure absolute accuracy in reporting. The court must ensure that initial reports are correct and that payment information is provided promptly to the reporting service to update the record. When accounts are outsourced to a commercial collection agency, the agency may perform credit reporting.
Ultimately the three credit bureaus decided not to support the reporting of delinquent fines and fees, and such debts would not be considered when scoring a person’s ability to extend credit terms. Based on all of these factors above, the county chose not to implement.
This section was written by Nadine Jenkins, Director of Collections, Montgomery County, Texas.
In 2008, the Montgomery County Collections Unit considered adding reporting court debts to credit bureau reporting as a component to the collections process. During the same period of time, the three major credit bureaus, Experian, TransUnion, and Equifax, were contemplating whether to accept the reporting of delinquent payments of fines and fees in criminal offenses and traffic offenses. The investigation revealed the following information: •
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The cost of reporting delinquencies was fairly substantial. One piece of software was necessary to submit a delinquency, and another for the recalling of the case reported. The return on investment was not positive once the costs of: labor for submitting and recalling a debt, notification to advise the defendant of the process, and postage, were included. Recalling traffic-violation submissions required additional labor, and the cost of recalling and submitting was great due to volume and would require staff dedicated strictly to that process. In-house collections and flagging of the defendant’s driver’s license had a much more significant return on investment of labor and other resources, and generated a much faster turnaround response time in generating revenue. Most people with misdemeanors and felonies have bad credit already.
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Montgomery County, Texas, is an example of this model. This county developed its own collection unit specifically to address all misdemeanor and felony offenses. The collection unit was initiated by one judge and one county commissioner who decided that they did not have the time or expertise to review and develop payment plans for the many defendants. The collection department grew from one court (judge) and one employee to collecting for 11 courts (judges) with 14 employees. It is a selfsupporting unit.
Chapter 6 IN-HOUSE COLLECTION UNIT 6.1 Organizational Considerations of In-House Collection Unit This section was written by Nadine Jenkins, Director of Collections, Montgomery County, Texas.
The court or an assigned unit may take responsibility for all aspects of collection, sometimes with the organizational support of the local government. Responsibility may include the initial collection for those who pay immediately, setting up payment plans, and following up on delinquent accounts. Courts that take this approach typically are those that have enough resources to conduct the entire process. Another approach is for a group of courts to band together to form the collection unit. Considerations for courts’ banding together should include geographical location, jurisdictional differences, and employment differences. This model works well in part because the staff is organized as an independent unit, not simply clerks assigned to collection tasks. Processes and tasks are clearly collection or enforcement oriented. State courts that are in a non-unified, locally funded system may consider this approach. State-funded or unified court systems may be more likely to have statewide resources for courts to draw on at some point in the collection process. The advantage of an in-house approach is that the court has responsibility and, consequently, control over the entire process. Improving collections can occur at any point, and changes can be made to the process for improvements. Staff can be hired based on skills related to collection tasks. These skills are not necessarily the same skills that may be used in a clerk’s office or courtroom. National Center for State Courts
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6.2 Organization of the Collection Unit’s Work
As described in Section 1.3 “Role of State Judicial Leadership,” the Texas Office of Court Administration (OCA) established a Collection Improvement Program to assist cities and counties with collecting fines, court costs, and fees assessed when defendants are not prepared to pay all amounts at the time of assessment, and when time to pay is requested. Program requirements exempted collection of victim-restitution or community-supervision fees. Setting up a program in a city or county means setting up a collection unit. The OCA expected each locality to determine under which office or branch of
government the collection program would most appropriately operate and agreed to be satisfied as long as the operation complied with the Collection Improvement Program requirements and all applicable statutes for the collection of fines, court costs, and fees. The OCA acknowledged that staffing requirements vary greatly depending on court type, volume, and traffic. Generally, one person should be able to support court volumes ranging from 10,000 to 15,000 convictions (including deferred adjudications in that term) annually. The rules under which these Collection Improvement Programs operate are set forth in Table 8 below. 1 These activities are not intended for defendants who have been determined to be indigent.
Table 8 Components of Texas Collection Improvement Program Program Component 1. Written Collections Procedures
Importance and Flexibility of Component Importance • A written procedure ensures consistency and provides a blueprint that can be used regardless of changes in personnel. Flexibility • Some programs have created detailed procedure manuals. • Some programs rely on internal memos and other written directives.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 2. Dedicated Staff
Importance and Flexibility of Component Importance • Without dedicated staff, collection activities tend to be neglected or ignored; cases are not continuously monitored to ensure payments are made, phone calls and notices to delinquent defendants are not timely, and a large backlog of uncollected cases develops. • Staff should have a basic understanding of collections (in this context, collections is not defined as receipting money or cashiering). The collections function is designed to facilitate payment/compliance by applying collections industry techniques to encourage the offender to pay (comply). • Historically, staff turnover rates in the collections industry lead all other professional categories. This reflects the difficulty of the job and why it can rarely be effective if attempted on a casual basis. Flexibility • Each local program must have a minimum of one staff person whose priority job function is collection activities. The priority collection job function may be concentrated in one individual employee or distributed among two or more employees and need not require 40 hours per week of FTE time. • Designed to ensure that the collection of court costs, fees, and fines is a priority.
3. Immediate Payment Expectation
Importance • Immediate compliance reduces the court’s costs associated with managing compliance, and it reduces the increased risk of arrest for the defendant. • If defendants have the opportunity to postpone compliance with the court’s order, most of them will. • Decreases staff workload - instead of processing many payments from each defendant, you only have to deal with one. • Sends a clear message of compliance. Flexibility • Generally, the judge announces from the bench before court begins that court costs, fees, and fines will be due upon assessment. • Some programs post notices in key areas around the courthouse and sometimes in the courtroom itself. • Some programs advise criminal justice system stakeholders of this requirement through meetings and memos.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 4. Application and Contact Information
Importance and Flexibility of Component Importance • Designed to capture contact information and determine financial ability to pay. • Defendants who need time to pay usually do not object to completing the application, while others who actually can pay in full will do so and leave because they do not want to spend unnecessary time and effort to complete the form. • Prevents setting a defendant up for failure. By having and reviewing a defendant’s financial status, collections staff can place the defendant on an appropriate payment plan. • Without this process the defendant is placed on the “honor system.” Private companies and financial institutions do not extend credit without first obtaining contact and financial status information from the borrower, why should the courts? One need only look at the FIRST step taken by the private sector (skip tracing), when an account is referred to collections, to understand the importance of this component. • Personal identifiers, such as Social Security numbers and bank account numbers, are not required or recommended on the application form. Flexibility • Ideally, the application is taken immediately following court by the collections/compliance office or officer. • One municipal court takes the application during court before the defendant sees the judge. • One county takes the application during pre-sentence hearings for their criminal misdemeanor defendants. • Several counties take applications for justice court cases over the phone. • One municipal court distributes applications at sentencing and defendants are given 10 days to return it or pay in full. • Programs may use a single form for both the application and contact information. The required information must be obtained within 30 days of the assessment date.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 5. Verification of Contact Information
Importance and Flexibility of Component Importance • Simple verification of two key pieces of information (home/contact phone and employment/source of income) is essential. Experience shows that if these two pieces of information are correct, then the remaining information on an application is most likely correct. • In the (different, but not unrelated) context of indigent defense, the Task Force on Indigent Defense recently released a study, which concluded that “a comprehensive screening and verification program would generate financial benefits for those counties with a sufficient number of criminal arraignments.” Flexibility • Ideally, verification by a collections/compliance office or officer is completed while the defendant is at court. • In one municipal court, the bailiffs verify the information on the application during court and before the defendant sees the judge. • In one county, the application is forwarded to the collections/compliance office within 24 hours of appearance for verification. • Several counties use an automated system to verify information on the application while the defendant is still in the courthouse.
6. Defendant Interview
Importance • According to the American Collectors Association the number-one reason for payment default is confusion; this problem can be magnified in the justice system. This component is designed to ensure the defendant knows his/her responsibility and the consequences of failure. • If this component is applied effectively, the defendant should always know what to do and who to contact if there is a problem. Flexibility • Ideally, the interview is conducted by the collections/compliance office or officer before the defendant leaves the courthouse. • In one city, interviews are conducted by the judge after the application has been completed and verified. • In one city, interviews are conducted by designated staff at the cashier’s window following court. • In several counties, interviews for justice courts are conducted by the collections staff over the phone within 48 to 72 hours following court appearance.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 7. Payment Terms
Importance and Flexibility of Component Importance • Designed to expedite the payment process wherever and whenever possible. For example, a 48-month payment term for a $250 assessment (or the equivalent of a $5.20 payment per month) simply is impractical in most cases. Collections are reduced when a community-supervision case is revoked and the full payment has not been received. • The longer a defendant is in the system, the greater opportunity there is for default. • The longer a defendant is in the system, the greater the expense burden to both the defendant and the system. • The program is not designed to create court orders. It is designed to create a specific framework for the enforcement of court orders. Flexibility • The application of this component must never conflict with judicial authority or discretion. • One example is: For misdemeanors – 50% of the total amount due must be paid within 48 hours, 80% within 30 days, and 100% within 60 days. For felonies – the payment terms are generally shorter than the term of community supervision/deferred adjudication or parole. Payment terms for state jail felonies should be similar to other felonies except payment terms should generally begin after release. Please note these are examples only. Any payment terms established or ordered by the court acting within its statutory authority or discretion is acceptable. • Ideally, payment terms are uniform and relatively short. They are established by the collections/compliance office or officer in individual cases, using the guidelines promulgated by the judge(s). • One county requires non-probation misdemeanor defendants to pay in full within 30 days or face jail. Defendants on probation must pay within the term of probation. • Several counties assign both probation and non-probation misdemeanors to the collections/compliance office, with payment terms established by the office – those terms do not generally exceed 90 to 120 days. • One county court at law requires defendants to pay in full within 90 days of sentencing, but allows extended-term payment plans if the defendant cannot pay in full within 90 days. • One county requires payment in full within six months.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 8. Account/Payment Plan Compliance Monitor
Importance and Flexibility of Component Importance • Designed to ensure effective case compliance management and timely followup of cases in which the offender defaults. • Timely follow-up is crucial to the collections process. Poor follow-up is usually at the root of any troubled collections program. Flexibility • Ideally, cases are assigned to the collections/compliance staff to monitor for compliance. • One county employs a single coordinator that monitors each court to ensure the court staff is monitoring compliance with payment agreements. • Several cities and counties have court collection software programs that monitor cases for compliance automatically.
9. Phone Contact
Importance • This is generally the first step (along with sending a notice) in any standard collection process. It is standard operating practice to initiate phone contact as soon as possible following default. • Timely follow-up is crucial to the collections process. Poor follow-up is usually at the root of any troubled collections program. Flexibility • Ideally, delinquent defendants are called immediately by the collections/ compliance staff assigned to monitor their cases for compliance. Within 30 days of a missed payment, a phone call must be made to a defendant who has not contacted the program staff. The phone call must be documented.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 10. Mail Contact
11. Pre-Warrant Notice
Importance and Flexibility of Component Importance • This is generally the first step (along with a phone call) in any standard collections process. It is standard operating practice to send out notification of delinquency as soon as possible following default. • Timely follow-up is crucial to the collections process. Poor follow-up is usually at the root of any troubled collections program. Flexibility • Ideally, defendants are sent a delinquency notice immediately by the collections/compliance staff assigned to monitor their cases for compliance. • Within 30 days of a missed payment, a written delinquency notice must be sent to a defendant who has not contacted the program staff. The written notice must be documented. • One county utilizes a collection vendor to send delinquency notices to delinquent defendants. • Several cities and counties use automated computer systems to send delinquency notices to delinquent defendants. Importance • Notification that collection/compliance efforts are about to be escalated is generally a standard procedure in any collections process. • This notice also serves as a final courtesy attempting to give a defendant every opportunity to comply with the order of the court. Flexibility • Ideally, defendants are called or sent a pre-warrant notice when a defendant has not responded to previous attempts to be contacted by collections/ compliance staff assigned to monitor their cases for compliance. • One county uses a collection vendor to send pre-warrant notices to nonresponsive delinquent offenders. • Several cities and counties use automated dialers or systems to call or send pre-warrant notices to nonresponsive delinquent offenders. • One county uses a warrant specialist (actually a collections supervisor) to make final-attempt pre-warrant calls to nonresponsive delinquent defendants. • Several cities and counties use warrant officers to make final-attempt prewarrant calls to nonresponsive delinquent defendants. • If a capias pro fine (“warrant”) will be sought for a defendant, a phone call must be made or written notice must be sent to the defendant who has not contacted program staff within 30 days of the written delinquency notice described in number 8 above. The phone call or written notice must be documented.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 12. Warrants
13. Use of Law Enforcement
Importance and Flexibility of Component Importance • The warrant is the ultimate consequence for failing to comply with an order of the court. It is designed to encourage personal accountability and respect for court orders. • In situations where a defendant continues to fail to comply with a court order and has been notified that a warrant will be issued for noncompliance, a warrant should be issued so that defendants do not come to believe that the threat of a warrant is just that, a threat, and they do not have to comply. • The threat of a warrant and the possibility of incarceration often produce compliance. Flexibility • Generally, programs work to identify hardcore cases – such as known repeat offenders – that require the court’s attention without the use of the warrant. But when all efforts fail, they will recommend issuing a warrant as a necessary next step in the enforcement process. • Some courts have elected not to issue warrants for failure to pay court costs, fees, and fines. Importance • Once a warrant is issued it can become an extremely effective tool in encouraging compliance. Service of the warrant sends a strong and clear message to lawbreakers and the entire community that compliance is not optional. • One of the most cost-effective and successful uses of law enforcement officers in the collections process has been establishing contact with the defendant to arrange for resolution before field service. Flexibility • Some programs have warrant officers assigned to and working directly with the collections/compliance office on warrant cases. • Some programs use warrant officers, marshals, and in some instances constables assigned to law enforcement agencies to contact defendants or serve warrants.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 14. Post-Warrant Notices and Calls
15. Alternative Compliance Options
Importance and Flexibility of Component Importance • The collections process does not end with the issuance of a warrant, and notification sends this message. • Notifying the defendant that an arrest warrant has been issued should be considered mandatory if previous notifications have advised of this intent; it would be mandatory if the Fair Debt Practices Act applied. • A phone call or notice advising that a warrant has been issued may be the one contact that finally gets the attention of the defendant and results in compliance. Flexibility • Some programs use in-house staff to make these follow-up calls and send notices. • Some programs use law enforcement officers to make these calls and send notices. • Some programs rely on third-party collection agencies or firms to make these calls and send notices. Importance • Individuals who are unable to pay are not exempt from compliance with court orders. The Collections Improvement Program is designed to give those defendants a reasonable compliance option. This can be accomplished with an assignment to a community-service or public-works program in lieu of payment of court costs, fees, and fines. Flexibility • Some programs work with community-service or public-works programs managed and operated by the county or city. • Some programs work with their community supervision and corrections departments who manage community-service or public-works programs. • Some programs have created their own community service or public-works programs.
16. Use of Statutorily Permitted Collection Remedies
Importance • Using statutes designed to assist with enforcing compliance with court orders for the payment of court costs, fees, and fines is strongly encouraged because it increases the opportunity for success. Flexibility • Ideally, programs use both the Texas Department of Public Safety’s (DPS) Failure to Appear program for nonrenewal of driver’s licenses and the Texas Department of Transportation’s (TxDot) Scoff program for nonrenewal of vehicle registration for defendants who fail to pay court costs, fees, and fines.
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Table 8 (continued) Components of Texas Collection Improvement Program Program Component 17. In-House Back-end Collections
Importance and Flexibility of Component Importance • It is important the collections process continues until there is resolution. There must be a plan in place to continue efforts to bring defendants into compliance and reduce the number of outstanding cases due to the nonpayment of court costs, fees, and fines. Flexibility • Some programs have specific internal procedures to continue working delinquent cases until resolved. They use all available tools, including the DPS and TxDot programs. They also continue to search and make contact with defendants no matter where they are to try to reach resolution.
18. Contracted Back-end Collections
19. Reporting
Importance • It is important the collections process continues until there is resolution. In some instances, it is more cost-effective to use contract vendors to work seriously delinquent cases after all internal efforts have been exhausted. Flexibility • There are statutory provisions for counties and cities to contract with private collection agencies and firms for the purpose of collecting court costs, fees, and fines. Importance • This component is required by statute. • By analyzing the information provided in the reports, OCA staff are in a better position to provide assistance to the collections/compliance office. • Collections/compliance offices can see how they are doing in relation to other counties or cities. Also, there is contact information should they want to contact another office on a casual basis. Flexibility • Though the Office of Court Administration (OCA) recommends monthly reporting, each program shall report its collection activity data online to the OCA at least annually in a format approved by the OCA.
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6.3 Screening Eligibility for Payment Plan: Collection Investigation Before a defendant is given additional time to pay an obligation, a best practice is to determine whether the defendant’s financial means justify a payment plan. Rather than the judge conducting colloquy with a defendant about ability to pay, the judge should refer the defendant to the collection unit to make this determination. If the defendant does not appear at the collection unit within a specified period, failure to appear will result in a warrant. The following is an example of a step-by-step process a collection team may use to determine a defendant’s ability to pay: 1. Every defendant who requests time to pay must complete a financial affidavit. One purpose is to provide information on which to base a decision regarding the defendant’s ability to pay. Having to complete an affidavit may encourage full payment from those actually able to pay and who either do not want to be bothered with a lengthy form or do not wish to reveal financial and personal information. 2. Upon completion of the affidavit, the collection investigator interviews the applicant. The affidavit is reviewed question by question to confirm the accuracy of the answers. Affidavits usually include a request for personal references. The investigator should call the references while the defendant is present or waiting in the hallway. Questions should be addressed to these references without providing the answers. For example: “Where does John Doe live?” rather than “Does John Doe live at 123 Main Street?” Calling references while the defendant is still present in the courthouse emphasizes the seriousness of the process and encourages the defendant to be truthful. It also prevents the defendant from coaching references before a call from the court. 3. If references are not provided or cannot be reached, the defendant should not be granted a payment plan, and full payment should be
required within 24 or 48 hours, depending on circumstances. 4. If it is determined that the defendant has the ability to pay, the collection investigator should initially require immediate full payment. Often, a compromise is permitted allowing payment on the defendant’s next payday. Most units insist upon payment in full in 30 or 60 days. Publicbenefits recipients are usually given more time to pay. 5. If it is determined that the defendant does not have the ability to pay immediately, the collection investigator completes a deferred payment plan order or agreement and give a copy to the defendant before the defendant leaves the courthouse. The court may impose a fee to cover in part the expense of conducting the screening, if a payment plan is established. 6. If a defendant fails to make a scheduled payment, the court should be ready to respond immediately with a telephone call or letter demanding payment and advising the defendant of the consequences of noncompliance. “Actions Upon Nonpayment” in the immediately previous section details how to respond.
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Not every staff person may be interested in collection work, and some will take to it more easily than others. Training is more important, however, than aptitude, though aptitude and interest are factors.
6.4 Staffing Considerations: Using Existing or Additional Staff
Some units use trained staff at the counter in the clerk’s office, staff in a separate location to interview staff and verify information by telephone, or some combination of the two. The staff position, referred to as a collection investigator or collection specialist, may be part-time or full-time.3 Collection units in a number of courts play a key role in the overall collection process. Collection investigators must be given authority to determine or recommend for judicial approval the defendants’ ability to pay and eligibility for a payment plan outside of the courtroom setting, using a standardized set of questions and a verification process. Most courts can begin an in-house collection unit by dedicating a portion of an existing staff position to the collection effort. If the manager has established a baseline of previous collection results, improvement of collections should become evident and justify the dedication of staff resources to the effort. Managers can apply management techniques such as refresher training, mentoring, and performance monitoring to make the collection unit a meaningful and interesting work experience. At the individual-collector level, managers can use several approaches for monitoring and publicizing performance measures for purposes of team building and recognition of excellent performance. Assuming a “level playing field,” setting up a monthly or quarterly competition among collectors can motivate them to improve their skills and performance. Based on competition periods, managers can give recognition to good performers and award prizes.
This section was written by Jim Lehman, Collection Program Manager Office of Court Administration, Collection Program, “Born to Be a Collector.”
Is it true that good collectors are born, not made? No. There are principles and guidelines that consistently produce positive results if they are consistently applied. Practice, not genetics, makes perfect. But practice does reveal certain key characteristics that are generally associated with successful collectors. We’ll call them the six P’s of successful collectors. 1. Package. What is the appearance of the collector? Does he or she present a positive professional look? What facial expressions and body language are present when the collector interacts with a defendant in-person? The old adage “you only have one shot to make a good first impression” applies here. Successful collectors will present a professional, calm, and assertive demeanor and will remain in this mode regardless of the circumstances. Effective collectors usually look the part. High-level training exercises for professional collectors now include videotaping collectors at work and allowing them to see themselves as the customer sees them. This has proven to be a very effective training tool. 2. Presentation. How does the collector sound when addressing the defendant? Is his/her tone crisp, businesslike, intelligent, confident? The delivery determines whether the defendant takes the collector seriously. Successful collectors practice delivery, everything from greeting to closing. Many high-level training courses for collectors now also require the collector to listen to audiotapes of himself or herself for self-evaluation.
3
For a full description of an in-house collection unit program, see Paul Litschewski, “Getting a Grip on Collections: An Overview of the Colorado Investigator Program,” Court Manager 6, no. 3 (Summer 1991). National Center for State Courts
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3. Predisposition. Is the collector comfortable collecting? Successful collectors have no problem asking for payment in full and the request sounds perfectly natural. Effective collectors can be firm without being insensitive. This cannot happen if the collector lacks confidence or interest. 4. Persuasion. Is the collector convincing? Successful collectors are usually masters of passive persuasion. They can usually use their powers of reason and suggestion to overcome objections or defuse hostility. Effective collectors can convince a defendant that it is in his or her best interest to comply. 5. Persistent. How quickly does the collector give up or give in? Successful collectors are tenacious and rarely give up easily. That’s not saying they don’t know when to quit and move on. Effective collectors have a very good feel for when to say when. But this will not occur until every reasonable scenario for resolution has been examined and exhausted. 6. Punctual. Is the collector time conscious? Successful collectors are generally extremely time sensitive. They have learned the value of time, especially as it relates to collections. Effective collectors are effective clock managers and they keep clear and concise records of their collection efforts. Is short, they can tell you who, what, where, and when on every account in their assigned caseload. The key to successful collections begins with sound process. Without a specific process new hires have no starting point and no destination; they will be lost. Establishing concrete steps to work from will provide them with a road map. Practicing those steps will lead them to success.
6.5 A Collector’s Professional Demeanor This section was written by Nadine Jenkins, Director of Collections, Montgomery County, Texas.
1. Listen to the defendant. Listen to their mood because it will tell you what will be the most effective approach in controlling the call. 2. Remain calm with the defendant. Do not let an angry defendant stress you out. They will try to deflect your ultimate goal, which is simply to get them to pay. If you argue, it gives them a reason not to pay. Stay relaxed, polite, and focused. A firm, assertive calm approach will produce results. 3. Keep your word. One of the most important aspects of a collector’s job is credibility. If you say that action will be taken on a certain date, then that action must be taken. When people know that you do what you always say you’re going to do, they take you seriously. 4. Follow up is critical to the collection process. • Always give your first call with the defendant the benefit of the doubt. There are defendants who will pay simply because you reminded them of the payment due. • Be firm and assertive. Have a plan for a second, third approach for the defendant. If the first technique does not work the second should be designed to get the defendant to pay and stop you from calling. • Be clear to explain the consequences of nonpayment if you have to make a third call. This is the time to apply necessary pressure. 5. Never say “Never.” Calling defendants who owe money is never a pleasant task, but it does not have to be an unpleasant experience. Remain upbeat and professional. Your mood will be infectious in helping to get issues resolved.
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6. Ask defendants the correct questions. What is the question most commonly asked by any collectors? “When will you be making that payment?” A better question would be, “Will you be making that payment today?” or “Will you be sending that payment this week?” With both of these questions you maintain control of the time frame and it eliminates manipulation of the answer. 7. Get a commitment from the defendant according to the payment plan they signed
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition This section was written by Michael A. DiMarco, Consolidated Collections Manager, Arizona Supreme Court.
Chapter 7 CONTRACTING COLLECTION SERVICES 7.1 Role of Outsourcing Collection Services in Court Collections
A collection agency is typically thought of as taking on the job of collecting debts that the court itself cannot collect because the court has limited or no internal effort, or after it has exhausted its efforts. A court may contract, however, for as little or as much of the collection process as it needs: it can pay a commission or a per-unit charge and piece out specific tasks like generating and mailing notices, making phone calls, locating defendants, and providing warrant notification. A court should consider its internal capabilities and determine what services are most cost-effective to outsource. Although outsourcing collection services defrays costs through authorization of a collection fee, outsourcing presents several legal and logistical difficulties; specifically, contractors cannot perform the following tasks: • • • • • •
Rescind a warrant; Require a defendant to appear in court; Set a court date; Discount or reduce judgments; Institute a payment plan; or Authorize an alternate disposition of a case 1
Given these deficiencies or hurdles, the court must still retain control and monitor the file, expend administrative energy tracking the progress of the collections, maintain accurate and detailed records, and periodically audit the contractor to ensure compliance with contractual obligations and adherence to applicable policies and procedures.
1
Collection agencies can be useful for rural, small, and understaffed courts, as well as large-volume courts, which can become inundated with calls, returned mail, etc., while attempting to collect monies owed to the court. While a collection agency (“contractor”) can be beneficial in collecting on old debt, it can also be used proactively to reduce the chances of the debt becoming delinquent at all. Pre-delinquency “Collections” A pre-delinquency collections program is one in which the contractor is proactively working a case from the creation of the case. This includes mailing notices to remind the defendant of upcoming court dates, as well as reminders of payments owed on cases with no mandatory appearance. Additionally, a vehicle-registration hold can be placed on a failure-to -appear case and a letter mailed to the defendant informing them of this action as an incentive for a defendant to appear in court. A web site link and interactive voice response (IVR) number are included on the mailed notices to inform defendants of these payment options, as well as information that they may mail a payment to the court or visit the court to make a payment. This manner of noticing occurs throughout the pre- and post-disposition life of the case. In Arizona, there is a flat fee of $7.00 per charge added to the case for these services. If the case becomes delinquent, additional fees are added to the case for collections (these fees are added in the court’s CMS as well), including a $35.00 per-case fee (which pays for collection programs such as the Tax Intercept Program [TIP] and the Traffic Ticket Enforcement Assistance Program [TTEAP] maintained by AOC) and a 19% collection fee.
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Collecting on Delinquent Debt Once the case enters the delinquency phase, the contractor can initiate a variety of sanctions to the defendant, with notice to the court, if payment is not made, which includes TTEAP and credit bureau reporting. All actions are updated in the court’s case management system via real-time, batch, or e-mail alerts to allow the court to be aware of and notate actions taken by the contractor. It is important to acknowledge that the court is the keeper of the record, and that all information that the contractor obtains (with the exception of new address information from skip tracing) is to be obtained directly from the court. This disallows the contractor from negotiating lower amounts owed by the defendant to be collected.
In regard to the collection agency being paid for all monies collected, the only exclusion in Arizona currently are payments collected through TIP. If a case that has been assigned to Arizona FARE for collection has money intercepted by the TIP program, it is not considered to be collected by the contractor; therefore, the fees are excluded from that payment. The new balance is then reported to the contractor for collection.
Keeping the Court in Control of the Records To aid in this, payments made on a case (including IVR and Internet payments) are sent directly to the court to receipt, which includes collection-agency fees, which are then paid out to the contractor usually at the end of the month. This is to ensure that the contractor is paid the percentage amount that was agreed upon and to keep both entities in balance. Payment reports are sent from the contractor to the court daily via e-mail for tracking and reconciliation purposes (and receipting to a case if it is not automatically done). Because all payments go to the court first, they are kept up to date as to the remaining balance owed on each case as well as if a case balance has been satisfied. Additionally, weekly compare reports are used to ensure balances match in both the contractor’s and the court’s systems. Exclusions and Cautions It is important that any collection agency used by the court be bound by a contract to act within guidelines according to law and up to the court’s standards to ensure insulation to the court should the collection agency attempt debt collecting using unlawful methods.
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7.3 Requests for Proposals for Collection Services
7.2 Collection Services Considerations
This section was written by Beth Barber, Trial Court Collections Project Manager, State Court Administrative Office, Michigan Supreme Court.
Pursuing collections is a discretionary action that is funded entirely by the local funding unit. Third-party collectors usually charge a fee ranging from 20 to 35 percent of the amount collected. For the easiest collections, the costs of a third-party collector will be greater than the costs of the court pursuing its own collection efforts. For more complex collection cases, the costs of a third-party collector may not be a factor, because after the court’s internal collection efforts have failed and the court has deemed the debt to be uncollectible, any money that a third party collects is money that would not have been collected otherwise. In most instances, it will be more cost-effective to provide the courts with resources for the front-end processes and initial follow-up and to contract with third parties to work cases after all internal efforts have been exhausted.
Even though state law may not require it, the court should issue a request for proposals (RFP) to find the contractor with the best capabilities and most advantageous business terms. Copies of actual requests for proposals for collection agency services are available from the NCSC, for both statewide and single-jurisdiction use. A model contractor collection services agreement is included in materials on changes to Texas law in 2004 concerning outsourcing collections contracts. 2
The determination to use a third party for collections should be made on a court-by-court basis. If courts choose to refer cases to a third party for the collection of court-ordered fines, fees, costs, and restitution, the third-party collector will keep a percentage (usually 20% to 35%) of the total money it collects. Consequently, a court must determine at what point in the collection process it has little hope of collecting the obligation and when the expense of using a third-party collector is justified. And while third-party collections is probably most valuable for locating transient litigants or collecting amounts considered uncollectible by a court, the results will differ from court to court based on the age and type of cases, the court’s internal efforts, available contact information, support from the court, and demographics.
2
•
•
•
•
•
• •
Issues to Guide Policymaking Does state law permit the court to turn collections over to contractors? Does this include collecting restitution or commercial bail bonds? Who is the contracting agent for the court (the chief judge, the prosecutor, the city, or the county governing body)? Is the contractor paid on a flat-fee or a contingency basis (and at what percentage of the proceeds) for collections? At what time after adjudication is it most advantageous for the court to refer accounts to an external collection services, i.e., at what point is the net cost to the court of using an external agency to collect delinquent fines less than that of the court making its own collections? Is data exchange between the court and the contractor automated, or is paper-based data entry required? If the contractor uses unlawful methods, is the court insulated? How would the court handle a dispute between the collection agent and a payer?
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Practice Tips Most courts give accounts to a collection agency or a governmental collection unit to collect, based on some criteria that is locally determined. Understaffed courts with limited staff or technical capabilities, or high-volume courts, are the most likely to use an external agency because they don’t have the internal resources to follow up on delinquent accounts. Many courts believe that with adequate technology (particularly large-scale capacity to generate and send notices) and use of providers of related services, they could do virtually all functions performed by collection agencies. With better and cheaper automation increasingly available, many believe that collections could be better handled by court staff. The contractor may be amenable to provide customer service representatives at court locations, as in Los Angeles Superior Court. The court provides a counter window, desk space, cash registers, and safes, and outsources this role to their collection agency. The web pages of the court and the contractor are linked, and defendants can pay at either Web site. Below are some suggested guidelines for using a contractor, which should be identified in the contract with the contractor: A court should retain accounts for the initial collection steps and as long as payments are being received, unless the defendant cannot be located or does not respond. The court can thus collect the “easy” cases and still turn relatively new accounts over to the contractor. Waiting too long will hinder the contractor’s success. • Clarify how and when the court will recall or otherwise get accounts back from the contractor. Possible methods are to limit the time to “work” the account and to take back accounts with no funds coming in. The contractor should prove that it is continuing collection efforts to keep an account. •
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Define any exclusions from the contract. Will the contractor be paid its percentage for all the cases it receives, whatever the reason for payment? One court was surprised to have its collection agency claim its percentage for all payments made to accounts it had previously “worked” before a court-run amnesty program. Although the payments were made solely as a result of the amnesty and not through any effort by the collection agency, the terms of the contract required the court to pay the agency its percentage. • Clarify the contractor’s experience and capabilities for skip tracing since this is usually the most important service the contractor provides the court. • A collection agency should have the capability to look up credit information and to report delinquent accounts to credit bureaus. • Require the agency to follow the rules of the federal Fair Debt Collection Act, for the purpose of maintaining public trust and confidence in the courts. •
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each payment the collections contractor is truly withholding from each payment.
7.4 Communications with External Collection Agencies This section was written by Amy Johnson, FARE/DSO Business Analyst (Fines/Fees and Restitution Enforcement), Arizona Supreme Court.
When collecting on a debt, it is very beneficial to (1) get information out to the contractor (collection agency or vendor) as soon as possible to begin collection actions and (2) to keep information regarding the case accurate between the contractor and the court. Getting information out quickly can help to collect on a debt faster as many defendants tend to change their locations frequently, so the quicker the debt is forwarded to the collection agency, the better chance there is on collecting on that debt. Keeping information accurate between the contractor and the court can help keep the contractor current with information that is updated in the court’s system. For example, if a date of birth is not available at the time a case is sent to a contractor, but is discovered by the court at a later date, this information may be beneficial for the contractor to have when attempting to collect on a debt. Additionally, information passed to the court from the contractor is essential for the court to keep track of payments made on the case, as well as collection fees that are being assessed (in an effort to hold the contractor to a previously agreed upon rate), noticing, and many other events. Issues from Lack of Court Visibility of Contractor Processes The contractor’s “normal” or traditional practice is receiving a paper copy of the case file from the court and beginning to “work” the case. The contractor collects payments and forwards them to the court, minus collection fees. Beyond that, not much information is passed to the court from the contractor. Essentially, this leaves the court blind as to what is being done to collect on the case, if the case is being “worked” at all, and what percentage of
Increasing Court Control over Accounts Referred to Contractors Arizona decided to put technology to work in collecting monies due to better manage cases referred to contractors, resulting in the creation of the full FARE (Fines/Fees and Restitution Enforcement) program. A fully automated interface allows the court’s case management system to communicate with the contractor’s system through a centralized storage system that keeps a record of all cases appearing in the court. It was created with the plan that the court could “pick and choose” cases to send to a certain contractor on a routine basis by the court electronically entering codes into their system (real time or batch) that would refer the case to collections. To do this, an event code and two receivable types (cost types) are set up in each court’s system that will (1) send the case to collections (via event code), and (2) assess the amount of the collections fees directly into the case in the court’s system (via cost types), which holds the contractor to collecting only the percentage of the case that has been previously agreed upon. The FARE program was also set up to have any payments made by the defendant directly sent to the court, first to be receipted, and then send the collection fees to the contractor (usually at the end of each month). This allows the court to maintain control of how much is truly being paid on a case and the case balance at all times. Additionally, this program allows the court to automatically send updates to the case (name change, date of birth, disposition changes, additional monies assessed, monies waived, etc.) in real time to the contractor’s system to aid in collections or to reflect increased or decreased balances.
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Development of a Data Warehouse The court’s case management system was programmed to communicate with a data warehouse maintained by the Administrative Office of the Courts, which stores information regarding cases. When a case is assigned to FARE, certain information pertaining to the case needs to be sent to the data warehouse for a case to be successfully collected. Examples of the information needed include the current balance existing on the case, party information, address, date of birth, initial assessments to a case, adjustments to dollars associated with a case (jail time in lieu of fines), initial dispositions or changes, and charges. This is communicated to the data warehouse through a series of transactions that are formatted to fit certain information into certain areas that can be accepted by the data warehouse. Once the information is accepted by the warehouse, it is passed through another series of transactions to the contractor, who then adds the defendant to their system. Subsequent address changes, disposition changes, payments, etc., that occur at the court are sent via batch or real time to the data warehouse, which then routes the information to the contractor. Additionally, any payments received by the contractor, or TTEAP (Traffic Ticket Enforcement Assistance Program), or holds that are placed on a case are sent from the contractor to the data warehouse, which then updates the court’s system automatically through an event-triggered transaction. This process allows information regarding all aspects of the case to flow real time (nearly immediately) or batch (nightly) from the court to the contractor and from the contractor to the court.
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Chapter 8 MORE-COERCIVE ENFORCEMENT MEASURES After routine collection efforts have apparently failed to bring about full payment, a court can consider other means to collect accounts receivable. These methods are widely used in collection of child support in most states and are increasingly used in collection of fines and fees. 8.1 Collection of Fines as a Civil Judgment: Garnishment and Liens
Whether or not a criminal judgment is collectible as a civil judgment is a matter of state law. In some states, fines and restitution may be collectible through civil means, but not fees or costs. Civil remedies include filing property liens and garnishment of bank accounts and wages. Issues to Guide Policymaking Does the court have a legal basis for obtaining a civil judgment and initiating garnishment or lien proceedings? • Who must pursue a civil judgment and remedies? Will the cooperation of another agency (e.g., the prosecutor, attorney general, or city attorney) be required? • How complicated and expensive is the civilremedies process; will the potential returns justify the effort involved? •
Practice Tips Use of wage garnishment assumes that a defendant has a stable job and that employment information is obtainable. Courts that procure Social Security numbers and employment background from defendants or that have access to the state’s employer-paid payroll-tax database have successfully used wage garnishments. In some states, considerable paperwork may be involved, or an outside agency attorney will be needed to prosecute a civil judgment, factors that should be weighed in determining the cost-effectiveness of the process. Some states allow garnishment of prison wages of incarcerated defendants to pay fines and restitution. Given the relatively low wages of prisoners and the relatively high fines of defendants sentenced to prison terms, garnishment may provide little benefit. See section 9.3, “Payment from Inmate Commissary Accounts.” Property liens and garnishment of bank accounts are usually simpler than wage garnishment. Most collectors agreed that the odds of locating assets owned by most delinquent defendants are not great. They generally do not pursue account garnishments unless the process is very simple or they have easily verifiable evidence of the assets.
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8.2 Income Tax Refund Intercepts (“Tax Setoff Program”)
8.3 Arrest Warrants and Incarceration
Income tax intercept procedures are available for the collection of fines in many states. They permit a court to seize a state income tax refund due a delinquent defendant to satisfy unpaid fines and fees. Legislation has been introduced in Congress for the past few years for intercepts of federal tax refunds. It appears likely that eventually it will pass, particularly in light of the current economic situation. Issues to Guide Policymaking • Is this method available for fine and fee collection? • What identifying information will be required by the revenue agency to execute an intercept? • How will information be communicated between the court and the revenue agency? Practice Tips There are common hindrances to income tax intercepts. The first is developing a process for transferring information between the court and the revenue agency. In automated systems, information exchanges usually can be fairly easily achieved. The process is more complicated for courts that use manual systems.
Nationwide, most warrants are served when a defendant is stopped for a traffic violation or other offense, and law enforcement checks for outstanding warrants. Most localities do not have marshals or warrant officers to actively serve warrants. Court management should consistently target offenders, such as defendants with the most outstanding warrants or other scofflaws. This may require dedication of some resources, but the strategy is likely to provide considerable payback, both in terms of enforcement and in favorable publicity for the justice system. Issues to Guide Policymaking • Which warrants are targeted? • Is there jail space available to incarcerate defendants arrested on warrants? Practice Tips Although serving warrants is time-consuming, expensive, and sometimes dangerous, the threat of arrest is often the most effective tool available to force compliance. Some of the techniques developed to increase the effectiveness of warrants include:
The second problem is lack of identifying information about the defendant. Generally, at least a Social Security Number and full name, including middle initial, are required, information that courts often do not have.
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The officer calls before serving the warrant; often, defendants will come in voluntarily to avoid arrest. • If the defendant is not home, the officer leaves notice of the attempt to serve and information on how to contact the court. A few jurisdictions use a brightly colored sticker or doorknob hanger. •
Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition
Courts in smaller cities and towns sometimes publish the names of individuals for whom warrants have been issued in the local paper. Where a regular warrant-service program is not feasible, the court uses occasional warrant-service initiatives. One municipal court carries out periodic DWI warrant sweeps, arresting 30 to 40 defendants. The media are tipped off to ensure publicity. The court claims that the combination of significant enhanced revenue and favorable press coverage more than compensate for the investment in overtime pay. A municipal court in Arizona, on the other hand, did not publicize its warrant sweep to prevent defendants from evading service of the warrants. Nevertheless, word of the effort reached many defendants who appeared to pay their fines voluntarily to avoid arrest. The court took in two or three times the amount spent on overtime for officers in payments made after arrest and an even larger amount of voluntary payments. Wise use of resources is necessary, of course, but such efforts help create an environment in which offenders cannot ignore their court obligations. Ultimately, the success of a court’s collection system may depend upon the availability and use of jail to threaten or punish defendants who are able to pay their fines and fees but are unwilling to do so. Shortterm incarceration or even simple detainment, coupled with telephone access to raise bail, has proven to be effective in some courts. However, regular warrant programs or sweeps will work best if several jail slots are available to house arrested defendants who fail to produce sufficient bail to secure their court appearances. Lack of jail space undermines the whole effort, making both defendants and law enforcement cynical about the efficacy of the justice system.
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Chapter 9 PROBATION/PAROLE DEPARTMENT COLLECTION ACTIVITIES
9.1 Pre-Sentence Investigations
Some courts have a probation department that collects fines and fees. The probation department that is the subject of this section, however, may be either a judicial or executive branch department that handles presentence investigations and supervision of defendants convicted of misdemeanors or felonies. Sentences with probation may include incarceration, restitution, and a relatively high fine (frequently $1,000 or more). Failure to comply with conditions of probation subjects a defendant to imprisonment. Collection of higher fines may present a special set of problems compared to lower fine amounts.
• • •
•
•
• •
Issues to Guide Policymaking Is fine payment clearly a condition of probation? Is probation used by the court as a means of fine collection? Does the probation department consider payment of fines, restitution, and costs an important obligation? Can and does the probation department file a violation of probation for nonpayment of a fine or restitution? Is a violation of parole for nonpayment treated seriously by the prosecutor and by the court? At the end of probation, does the obligation to pay expire as a condition of probation? Is probation extended until the fine is paid? If not, does the money judgment carry over after probation automatically, or is court action required? If probation ends without full payment, who is responsible for further collection efforts? Can/should the court seek payment from inmate accounts? When a defendant is released from prison on parole, does collection activity begin again?
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While not feasible in most courts for traffic or minor offenses, some probation officers typically prepare presentence investigation (PSI) reports to provide a written recommendation to the court regarding a defendant’s ability to pay a fine, as well as a payment plan. In one court, the collection unit prepares the presentence report for cases involving unsupervised probation and a fine. The presentence report includes a thorough financial investigation, a recommendation for a fine suitable to defendant’s financial circumstances, and a payment plan. In the same court, prosecutors often include fine payment terms in the plea bargain offer they make to a defense attorney. The plea agreements usually require the defendant to pay a portion of the fine, costs, and restitution on the day of sentencing or soon thereafter.
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9.2 Fine Payment as a Condition of Probation or Parole
9.3 Payment from Inmate Commissary Accounts
In many jurisdictions, probation officers are instructed to consider payment of fines, fees, and restitution as an important aspect of sentence compliance. In most jurisdictions, however, changes indicative of rehabilitation and behavior modification are considered more meaningful than payment of fines. In some cases, this is department policy. In others, it reflects the preference of individual probation officers; in such an environment, probation officers are less likely to “violate” a probationer for nonpayment. Some probation offices have successfully resolved this tension by designating one probation staff member as the “collection” officer, assigned to be the “bad guy” associated with payment compliance. Many defendants sentenced to prison also are sentenced to pay a fine. Frequently, the fine is unpaid at time of release. Most jurisdictions are diligent in investigating whether or not a fine or restitution is outstanding at time of release, and in making payment a condition of parole. Payment of restitution is often a higher priority because of statutory mandate. Some parole officers are more interested in seeing that a parolee finds employment and makes appropriate adjustments to reenter society, rather than in seeing that fines are paid. In such circumstances, the court may want to develop its own monitoring and enforcement procedures.
The Michigan Experience of Inmate Collections1 In Michigan, the 17th Circuit Court’s finance division director knew that the circuit court was receiving restitution payments for crime victims from prisoner accounts. She contacted the Michigan Department of Correction (DOC) and learned that DOC would also deduct funds from prisoner accounts for other financial obligations upon receipt of a court order. The State Court Administrative Office (SCAO) contacted DOC representatives and reached an agreement on standards for statewide implementation of the sweep process. SCAO developed specialized forms to initiate and terminate collection of prior debt. For new cases, the order is included with the judgment of sentence, and collection can begin as soon as the offender is remanded to prison. DOC processes orders monthly and collects 50 percent of the funds the offender receives over $50. DOC transmits funds to the court when they accumulate to at least $100. To encourage other courts to participate, the SCAO hired temporary staff to prepare 886 sweep orders for 20 circuit courts. In addition, a special financial match program was developed that enables courts to match cases with outstanding balances against the DOC prisoner file to automatically generate collection orders. The program has matched 7,262 cases and generated orders for circuit courts in an additional 26 counties.
1
Nial Raaen, “The Turnip Field – Prison Account Sweeps Yield Unexpected Results for Collections,” Court Communiqué 6, no. 4 (2005). - 74 -
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From inception to the date of publication in 2005, the 46-county sweep and financial match had already generated more than $333,000 in fine and cost revenue from prisoner accounts. Beth Barber, SCAO’s trial-court collections-project manager, credited the effort’s success to cooperation between DOC officials and the courts and believes that the program will eventually become a regular component of collection programs. The Texas Experience of Inmate Collections2 Upon arriving at a state prison, inmates turn over any money on their persons to the Texas Department of Criminal Justice (TDCJ). This money is placed in an inmate trust account. Any money that an inmate receives during confinement (e.g., from family and friends) is also placed in his or her inmate trust account. Relying on Section 501.014(e) of the Government Code, district judges ordered TDCJ to withdraw money from individual inmates’ accounts to satisfy fines and court costs. Typically, judges would issue a separate order of withdrawal, independent of the judgment, several months after the date of sentencing.
2 3 4
The Texarkana Court of Appeals held in 20073 ruled that formal garnishment proceedings are necessary before withdrawals can be made from an inmate’s account to satisfy a fine and court costs. Two other courts of appeals also issued rulings on the subject, one following Texarkana and the other not. Subsequently, the TDCJ decided to stop following the district court’s orders to withdraw money from inmate accounts to satisfy outstanding fines, fees, and court costs. In 2009, however, the Supreme Court of Texas ruled that inmate trust accounts can be tapped to recover court fees and costs assessed against inmates, because they are civil in nature and not part of the underlying criminal case.4 Post-judgment collection efforts are designed to reimburse the State, not to punish the inmate, and due process is satisfied if the inmate receives notice and the opportunity to be heard after funds are withdrawn. The TDCJ set up a procedure to reinstate the process for withdrawal of money from individual inmates’ accounts.
CourTex, Texas Judicial Branch News, Special Edition – Collection Program (August 2007), pp. 12-14. Abdullah v. State, 211 S.W.3d 938 (Tex.App.—Texarkana 2007, no pet.). Harrell v. State of Texas, No. 07-0806, June 5, 2009.
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provides capabilities not previously possible. Use of technology requires good policy and business decisions to guide it; this Handbook is intended to provide such guidance, and this chapter is aimed at discussing the tools to implement them. Table 9 below sets forth business capabilities needed to manage collections and technology tools that provide those capabilities.
Chapter 10 USE OF TECHNOLOGY IN COLLECTIONS 10.1 Building Business Capabilities Using Technology The use of technology allows tasks to be automated in ways that extend the capabilities of a person and
Table 9 Business Capabilities and Technology Tools Business Capability
Technology Tool/Consideration
1.
Record payments correctly in cases with more than one defendant and where joint and several payment towards restitution are ordered
1. Have the ability to credit payments to a particular person and charge in a multi-defendant case and, in a case with joint and several obligations, reduce the total obligation with each payment
2.
Identify financial monitoring
require
2.
Have the ability, with a minimum of effort, to manually or automatically set tickler review dates
3.
Set up a payment plan for each case, or modify an existing plan when a defendant is convicted in a case and is granted the opportunity to make deferred or installment payments
3.
Have the ability to set up a payment plan for a person, and either allow more than one payment plan per person or add to an existing plan, to accommodate multiple cases and multiple obligations
4.
Convert financial obligations to non-financial obligations (e.g., community service, jail time.)
4.
Have the ability, with a minimum number of steps, to convert a financial obligation to a non-financial one, and set up monitoring of the new obligation
5.
Send letter notices to a defendant with language appropriate to the stage in the collection process (e.g., first notice, subsequent notice, notice of impending additional sanctions.)
5.
Have the ability, with a minimum effort, to track what stage in the collection process a defendant is, and send an appropriate notice
6.
Improve the quality of addresses and reduce mailing costs for returned mail
6.
Have the ability, with a minimum effort, to obtain new addresses for non-delivered letters (skip trace) or use a service to improve address data quality and populating the database with updated addresses
7.
Contact defendants by phone in a cost-effective way, using the language spoken by the defendant and ensure that allegations of abusive calls can be avoided or refuted with evidence
7.
Have the ability to automatically make phone calls on specific days and at times of day, use prerecorded scripts appropriate to the defendant’s language and type of call, leave a message, allow the defendant to immediately call the collector back, monitor hang-ups, and record all conversations
8.
Provide a means for defendants to access information about their obligations and pay by phone or Internet
8.
Have the ability for defendants to look up their obligations and to make payment through interactive voice response (IVR) and the Internet, and with a minimum of effort, update the database with payment information
9. Provide a means for staff to identify priorities in applying efforts to collection tasks
9.
Have the ability to produce screen displays or reports identifying individual or classes of cases, according to prioritization criteria, for directing their efforts
obligations
that
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10.2 Software
Software that improves the monitoring and enforcement of financial obligations may be part of a case management system (CMS) or a standalone module that should be integrated with a CMS. Not every CMS has all of the functions needed for inhouse collections, so a standalone module may be a solution to making collection staff more productive. The more closely integrated with the life cycle of a case and overall case management functions a collection module is, the less labor will be required of the system users, e.g., no duplicate data entry or updates. Defendant/Account Information Software used for collections needs to keep track, by defendant/account, of a variety of kinds of information. Table 10 sets forth a list of these functions.
Collection-Related Software Functions Software useful for in-house collections must be able to perform a variety of functions that fulfill the business capabilities and the defendant/account information needs described above. Some actions can be automatically initiated by the software based on business rules, notifying the user. For example, the software can be configured to identify the occurrence of a condition becoming “True,” as when the current date matches a tickler, or when the current date matches a due date set by staff or set automatically by the system. Staff then takes the action that the system prompts. To the extent that the business rules are completely analyzed and completely implemented, no financial obligation will “fall through the cracks.” Other actions are initiated by events that occur in court or at the counter and are carried out by staff for administrative reasons (e.g., apply funds received from third parties) or under direction of a judge (e.g., convert fine to time served). To the extent that the software has workflow capabilities, when a
Table 10 Defendant/Account Information for Management of Collections Type of Information
Examples
Payment due 1. Status of the obligation, as a trigger to a Payment delinquent business rule or selection criteria for on-screen Which letters have been mailed or printed report or letter Broken promises Non-sufficient fund (NSF) check(s) received 2. Account and payment history , as a trigger to a Number of days outstanding business rule or selection criteria for on-screen Number of days without payment or printed report
3. Contact log
4. Status and history of address/phone data
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Date and time of contact Type of contact (in-person, phone, mail) Staff person making log entry Active address/phone, including type of phone (home/work/cell) Mail returned Disconnected
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chain of events is manually initiated by staff, further actions can be accomplished by the software with minimal human involvement (e.g., staff schedules a hearing, and the system automatically generates a notice, makes a docket entry).
of function or decision being performed. The system may send a notification to staff because an account meets some criteria, or staff may recognize the need by occurrence of some event or generate a report periodically.
Still other actions may be initiated either by staff or by the system automatically, depending on the type
Table 11 below sets forth a list of these functions.
Table 11 Collection-Related Software Functions Function or Decision
How Initiated
1.
Receipt payment
Initiated by staff
2.
Distribute funds daily/ weekly/ monthly to appropriate funds in the jurisdiction Generate document from template, e.g., notice, letter, order
Initiated by staff
3. 4.
5. 6.
Create payment plan, including multiple plans for a defendant for additional cases resulting in a fine before an existing account is paid off Monitor payment due/delinquent dates
Either by staff or automatically by system, depending on context Initiated by staff
System automatically notifies staff System automatically notifies staff
7.
Prioritize collection tasks for collector (e.g., by debtor status code, type of obligation, amount of obligation, number of days outstanding, number of days without payment) Notification to staff to remind debtor by phone
8.
Notification to staff to remind debtor by letter
System automatically notifies staff
9.
Suspend/Reinstate license, e.g., drivers, hunting, professional
System automatically notifies staff
10.
Put hold on vehicle registration
System automatically notifies staff
11.
Refer account to external collection agency
System automatically notifies staff
12.
Withdraw account from external collections
Initiated by staff
13.
Initiated by staff
15.
Intercept funds, e.g., state income tax refund, lottery winnings, prison account Apply funds received from third parties, e.g., collection agency, tax intercept Garnish wages
16.
Execute wage assignment
Initiated by staff
17.
Initiate show-cause proceeding, e.g., failure to pay or comply
System automatically notifies staff
18.
Issue warrant
19.
Convert fine to time served
Either by staff or automatically by system, depending on context Initiated by staff
20.
Convert fine to/from community service
Initiated by staff
21.
Skip trace Debtor
Initiated by staff
22.
Suspend collections, e.g., bankruptcy, death
Initiated by staff
23.
Write off bad debts
System automatically notifies staff
14.
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System automatically notifies staff
Initiated by staff Initiated by staff
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Performing these functions should entail a number of related functions: • Making a docket entry of action taken • Saving documents generated in the document management database, and creating a link to the docket entry • Making an indication of the status of a case or person based on the action taken, for use in taking further action, measuring performance of the overall collection effort and of individual performance, and in providing an audit trail for actions taken.
10.3 Software System Interfaces
Another software function is information exchange between the collection module of the case management system and other systems, internally or externally operated. An automated interface avoids data entry from paper and the productivity issues associated with it: resource expense of handling/ storing paper and performing data entry, delay in processing, and errors in data entry. Exchange of data requires attention to detail in sending and receiving agreed-upon data in a specific format and putting constraints on how the information can be used. A contract with an external unit, or an intergovernmental agreement or memorandum of understanding with a government agency, is advisable to govern the relationship. When importing data, it is advisable to incorporate on-screen or printed exception reports to enable users to view items that do not meet data edit and acceptability requirements. Data should not be blindly incorporated into a court database without review and acceptance by a clerk. Export of data to a word processor through a mail merge operation is often considered a standard software function of a case management system. In a collection environment, it is useful for generating custom documents, notices, and addresses for file or address labels. Data can be exported to and imported from a variety of other systems, depending on the capabilities of the collection module. Exporting data is a simpler operation, since importing data requires review of data or exception reports. Export of data in a comma-separated-values (CSV) format used by spreadsheets is a common feature of database systems. Each line in the CSV file corresponds to a row in the table. Within a line, fields are separated by commas, each field belonging
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to one table column. Managers with spreadsheet skills can analyze data from the database in more ad hoc and analytical ways than system displays or reports can provide.
The most common interfaces between the court’s case management system and county, state, or commercial applications include the following in Table 12 below.
Export and import of data in custom formats, according to the needs and capabilities of an external system, requires custom software development. Changes to data fields or data format in the external system must be reflected in the interface, so coordination between the two systems is required (point-to-point interfaces). To the extent that standard interfaces for exchange of collection related information are developed (using, for example, data elements in the National Information Exchange Model [NIEM]), the prevalence of custom data formats will be reduced.
Ideally, interfaces should have both export and import capability (two-way interfaces). Automating only export of data achieves some savings, but manual data entry of information coming back compromises the benefits of the interface. For instance, sending accounts to a collection agency involves sending case number, name, identifiers, contact information, and amount owed. When the collection agency sends information monthly on amounts received, this information should be in electronic format to facilitate updating the cases in the case management system with payment information.
Table 12 Case Management System Interfaces for Court Collections
1. 2.
3. 4.
5.
6.
Information Exported to or Received from Interface Scanned images of documents useful in collections Accounts referred to a third party for collection that meet agreed to criteria, payments made directly to the court on referred accounts, and recalled accounts Amounts received and related information collected by external agency Individual or groups of defendants submitted to the service provider to obtain additional function Responses to queries from external service provider, by individual account or group lists of information, Accounts meeting state criteria for the tax intercept program
Receiving Agency/System Document management system, viewable with links in the case management system External collection agency (public or private) or specialized collection software module, for tracking, collecting and reporting back to the internal court system Internal case management system, from external agency system External service provider or internally hosted software package (e.g., autodialer, address verification, NSF items, and skip tracing) Internal case management system, from external service provider or internally hosted software package (e.g., autodialer, address verification, NSF items, and skip tracing) State revenue department tax intercept program
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10.4 Data Warehouse
A data warehouse is a centralized database used to share information originating from disparate data systems to improve system and information integration. The typical approach is to download information from systems to a warehouse that is accessible to the justice community. The warehouse is used not only for sharing of information and the collection of statistical data, but also for other messaging and subscription service applications that can push information to appropriate agencies when specific events occur.
partners. It provides the internal capacity to match parties across courts in the state and provide information on possible alternate addresses. It also combines receivables across courts as inputs to the tax intercept program and the vehicle registration suspension process . Some of the data sources include court case information (criminal, civil, and protection orders), court financial information, and adult/juvenile probation data. JUSTIS not only deals with the Arizona courts, it deals with external agencies such as the Arizona Department of Public Safety (DPS), the Arizona Motor Vehicle Division (MVD), and other external entities.
Some states and jurisdictions have a judicial data warehouse with data that is apart from daily operations, typically loaded from operational systems at regular intervals. Data is organized in a way that is meaningful for business analysis and reporting, and facilitates queries for decision making, data mining, and knowledge discovery to meet higher-level goals. Data warehousing creates one database from multiple sources. The final result, however, is homogeneous data which can be more easily manipulated. Michigan’s judicial data warehouse, for example, gives court personnel the ability to search for a person known to the Michigan Judicial System and all cases in which he or she is involved, without regard to a specific county or court CMS. This has been found to assist judges and administrators in a number of ways, including assisting in locating defendants by providing more current address information. A collection use would be looking for potential matches of delinquent obligations, and in particular with the Department of Corrections for prison data on defendants, and seeking collection of money from commissary accounts. The Arizona Supreme Court has created JUSTIS (Judicial Statewide Information Services), which includes a statewide data warehouse. The data warehouse is a component of the central hub that manages and routes cases to the courts’ collection National Center for State Courts
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10.5 Autodialers and Predictive Dialers
This section was written by Nadine Jenkins, Director of Collections, Montgomery County, Texas.
An autodialer is a device or software that can automatically dial telephone numbers using phone numbers loaded from the court database, saving the effort of looking up and manually dialing a phone number. Telephone numbers are queued for dialing, and the autodialer will begin to call each number on the list. When the autodialer senses that a connection has been made, an automated message, including instructions on how to get to a live person, will begin to play. In other versions of autodialing software, a connected call will be routed to a collector, who will interact with the person called. A court that implements a program of phoning defendants will find that an autodialer device, or a service that provides such a device, will make collection staff more productive. Some labor is required to enter and maintain phone numbers in the autodialer system software if there is no automated interface, and a procedure for identifying which accounts should be called is also needed. A predictive dialer is a type of autodialer, but enhanced with computing power that can perform a variety of functions, depending on the vendor. Generally, it can predict when a collector will be available to speak to a defendant and will time programmed calls so that a collector will likely be available. Numbers are then dialed at an appropriate pace, and calls are transferred to collectors only when a live person has answered and seeks to talk to a collector. A predictive dialer can automatically dial batches of telephone numbers for connection to one or more collection agents, like an autodialer, but it has additional features that increase collector productivity, such as allowing the person called to talk to a collector, and dynamically controlling the pace of calls based on collector availability.
The dialer gets 70-80% penetration by obtaining voice or voice-mail contact. Success depends partly on the unit’s 90-95% rate of good phone numbers. Collections verify contact information at every opportunity, and the unit uses a skip-tracing service and address verification through the U.S. Postal Service. The dialer software identifies phone number anomalies and duplicates, and produces daily statistical breakdowns of the total calls scheduled that day, including invalid numbers, no answer, and busy numbers; the number of connections and whether they were answered live or by an answering machine; and the number of people who chose to talk to a collector, and during what hours. This information allows the unit to direct its collection efforts more effectively. As an overall evaluation, after five months using the predictive dialer in Montgomery County, it changed the entire operation. Collectors can actively work on more cases because it automated contacting defendants. Collectors spend more time talking to people, rather than manually dialing numbers, waiting for calls to go through, or hanging up on busy signals and answering machines. It allows the collection unit (with 14 collectors) to make thousands of contacts a day instead of hundreds. Features of a Predictive Dialer The system allows creating custom messages. The first few words are key to keep the person being called listening, and the manager should write scripts with this in mind. The messages are loaded into the system by creating a voice-format file and transferring it to the predictive dialer software. The predictive dialer can be set up to call at certain times of the day, with options to allow calls to be made one to four times or wait for a live voice. Montgomery County has built a weekly schedule of all its collectors and the courts for which it collects (e.g., justice, county, district), and each day the dialer sends out a court’s calls. The recipients of a dialer call on a given day may be people past due, or people who have missed a payment, depending on the manager’s priorities.
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The software has a feature that lets the defendant select option “3”on the phone that allows the person being called to speak (“link back”) to a collector. When this happens, before the collector answers, he hears a “whisperback” that identifies the case number of the person on the line and says how much money the person is behind, and then the person is connected to the collector. The collector is able to start working with the person, informed about the status of the account. This allows a collector to handle many more calls per day by not having to look up account information before starting to talk.
can use different voices and languages. The system can also operate on Saturdays.
The predictive dialer generates daily reports of how many people chose to link back, and how many hang up, so collectors can call them all back. Management can see what levels of court got which calls and individual collectors. With experience, the collection unit learned the best time of day to call, and the most effective messages, in relation to payment rates. With such information, they have found that for each person who gets a call, 90% then make a payment within two days.
Collectors call people who haven’t been hit by the dialer the exceptions. Collectors are receiving calls, not making them. Defendants at work generally will answer their cell phones, and they will call back if they have the number. Collectors can put whatever they want on the caller ID to help ensure that defendants are more likely to pick up the call.
The technology is appropriate for courts of all sizes. No equipment is required if the system is hosted by the vendor on the Internet. Courts can use basic functionality, such as sending out pre-hearing notifications for defendants, reminder calls to reduce number of failures to appear, pre-warrant notification, and juror notification. For instance, a message can say, “If you do not pay or appear, in 10 days this case is going to warrant.” Effect on Collector Staff Productivity At the collector level, staff can determine the best time of day to call, what message is appropriate for various sets of circumstances, and when payment is made. The collector can be sure the call is being made – the system scrubs bad numbers and duplicate numbers. The system also tracks cost – the collector may reduce from four calls to three if calls for a given segment of defendants are less effective. Collectors can set it for all calls to end at 4:30 when they leave the office, and accounts not called are loaded into the next day’s call list. They National Center for State Courts
The manager can monitor system activity during the day and every day of the week. If the dialer operates on the weekend, experience will show the best time of day to find people at home. At 12:15 PM on Saturday, for example, even though a collector is not on the phone, the message offers Western Union as an option to press a key and pay. The following Monday collectors come into the office and find many Western Union checks already received.
All calls are recorded, so collectors can prove that a given call was not abusive if the defendant alleges it was. Recordings are also a training tool, because collectors can hear themselves and be coached toward better performance. This makes managers more productive too, by seeing what works best. (Texas law allows recording of calls with the consent of only one party.) When the collection unit adopted the dialer, some collectors were concerned because of the rate that calls were coming in. They tested how many calls collectors could handle per minute and set a standard that everyone could achieve with moderate effort. As collectors became used to the new workflow, management was able to increase the call rate gradually, and collectors did not even notice, though the manager did not want to set unreasonable workloads.
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Cost of a Predictive Dialer The predictive dialer costs Montgomery County $1,200-1,500 per month for a subscription, for about 8,000 calls. It is a subscription, not a purchase. The vendor customized the dialer to meet the needs of the operation, and customization was included in the cost. The dialer has delivered a good return on investment, because the unit improved its collections by over $400,000, vastly exceeding the cost of the dialer. Collector Auditing and Training Benefits Where the manager used to do 50 audits to make sure people were calling and mailing, the manager now has two screen displays and can watch all day what’s going on. A manager simply cannot watch every collector and know how they handled all their calls. The predictive dialer allows the manager to spot-check collector performance and develop a concrete understanding of how each collector is doing. Since all calls are recorded, the manager can go back and verify what transpired during a conversation between a collector and a defendant. If a judge wants to hear the conversation, they find that it is not always what a complaining defendant is portraying to the court.
10.6 Skip-Tracing Services
One of the realities of collection is that people move frequently, and the more time that passes increases the likelihood that the address will produce a returned notice. Skip tracing is a term used to describe the process of locating a person’s whereabouts. Services are available to automate processing to locate new contact information. Skip tracing used to be difficult because address directories were printed; now skip-tracing services are available online. The more information that a court has about a person, the more effective skip tracing will be. A certain percentage of notices and other mailings to defendants will be returned as undeliverable. Postage will become increasingly expensive, so obtaining a current address saves money and makes mail notification effective. Before sending a group of notices, a court can run the addresses through a skip tracer to get a good list, and then do the mailing. A variety of services are available to locate people, including the following: •
The predictive dialer is also a training tool. Collections experience is not a prerequisite for employment as a collector, because people can be trained. At the beginning, or as a refresher, the manager can listen to phone conversations, either the collector’s side or the caller’s side, or the entire conversation. The manager can use this capability as a training tool to coach a collector’s responses and performance. Because this is such an effective tool, it has freed up significant time, allowing the manager to more effectively manage both the staff and the entire workflow.
•
•
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The U.S. Postal Service offers a variety of address-verification services and products The Social Security Administration can validate Social Security numbers to their owners, and compare SSNs against the Death Master File to screen numbers for fraud Commercial databases of addresses and phone numbers
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Credit-reporting companies also provide, for a fee, collection scores to identify accounts with the greatest recovery potential. The Los Angeles Superior Court through its collection agency uses a collection prioritization service to locate a debtor and determine a debtor’s financial capability to pay. Commercial debtor location services are more effective if the court has a defendant’s Social Security number. Some courts are prohibited from keeping this identifier, while others may capture it from a payment-plan application.
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Practice Tips
Chapter 11 OPERATIONAL INFORMATION AND PERFORMANCE MEASURES Court managers need information for operational and management purposes. A collector needs employment and family-contact information to aid in locating a defendant who has not paid. A manager needs information on the whole collection effort to evaluate the effectiveness of current practices and to measure the effect of different collection practices. 11.1 Obtaining Defendant Information for Collection Purposes
A critical first step for any collection strategy is determining if and when a defendant has the capacity to pay a fine or fee and whether to pursue delinquent accounts. The best-managed collection programs require at least a financial affidavit from a defendant before permitting a deferred-payment arrangement. In addition, some courts employ fine collection personnel who also review the affidavits, interview defendants, and verify the information provided.
•
• •
Issues to Guide Policymaking Can more or better information about a defendant be collected at the time of the offense or at the time of the court appearance? Can the court obtain a current address and phone number from state agencies? Can the court obtain a current address and phone number from utility companies, credit bureaus, or other commercial sources at reasonable cost?
Information from State Taxation Authority In many states, the department of taxation (department of revenue) will furnish current address information to a court for its confidential use in collecting accounts receivable. Local taxation records also can provide addresses. Division of Motor Vehicles (DMV) In many jurisdictions, a direct link now exists between the court and state DMV, allowing the court to provide online suspension notification along with access to DMV driver histories and addresses. Other Courts and Governmental Agencies Since other local courts and governmental agencies may have information useful in locating defendants, fostering relations with individuals within these agencies can be worthwhile. Courts should not accept at face value a refusal to provide information on the basis of confidentiality. In some cases, governmental information not subject to public access may be available to a court. One court maintains a link with the state labor department to access unemployment claims. They’ve found that addresses are almost always accurate with a claim to ensure that the unemployment check arrives promptly. Consumer Credit Information Although a fee is involved, private agencies are experts at skip tracing and often can find a missing defendant more quickly than a court can on its own. When a court can negotiate electronic information exchange relationships, the court can gain access to information at reduced cost compared to entering data from a paper source.
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11.2 Policy Issues Related to Caseflow Management Information
11.3 CourTools Performance Measure 71
Managing court collections is simply post-disposition caseflow management. Court administrators need information to manage the collection process. The information collected and reported will vary depending on the court’s goals. Possible goals may include: • • • • •
•
Accurately report on effectiveness of collection efforts Determine the effect of policy or operational changes Justify additional collection resources (e.g., staff, equipment, software) Do revenue projections Develop goals for improving timeliness of collections (i.e., 50% in the first 30 days) and determine if the goals are being achieved Develop goals for reducing receivables (i.e., reduce the number of accounts six months old by 50%)
Managers can take comfort in the fact that there is no “national standard” collection rate. Each court needs to find its own current level and employ methods to improve it. •
•
•
• • •
Issues to Guide Policymaking What is the court’s current collection rate for fines? For restitution? For costs? For appointed counsel fees? Can the court’s information system generate a list of defendants with outstanding fines and fees that are a given number of days old? How quickly are fines, fees, and restitution posted to court records after ordered payable to the court? How quickly are payments posted and warrants quashed? Does satisfaction of a judgment require a court order? At what point is a debt written off?
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CourTools Measure 7 is defined as “payments collected and distributed within established timelines, expressed as a percentage of total monetary penalties ordered in specific cases.” The results of this measure should be reviewed regularly (e.g., monthly, quarterly, annually). If reviewed regularly, the court can establish baselines, set performance goals, observe trends as they develop, and aggregate the data for annual reporting. The first task is to compile a list of all misdemeanor cases (or other case types) in which (1) a financial penalty was ordered on any date, and (2) the due date for final payment falls within the reporting period. The term total monetary penalty includes all financial obligations associated with misdemeanor cases, regardless of local terminology and practice (e.g., fines, fees, assessments, restitution, etc).2 The number and dollar total of monetary penalties will lead to some understanding of the dynamics of judicial sentencing. CourTools Measure 7 proposes calculating the compliance rate for cases in which monetary penalties were due in full in a given month. Only cases in which final payment of the total monetary penalties is due that month are counted. (Most courts look only at the dollar volume received during a month.) The illustration in the CourTools Measure 7 brochure, set forth in Figure 2, explains the approach.
1
National Center for State Courts (2005), “Measure 7: Collection of Monetary Penalties,” CourTools. http://www.ncsc.org/ D_Research/CourTools/Images/CourTools_measure7.pdf.
2
If the case includes an order for restitution, additional information will include the amount of restitution ordered, the amount of money collected and applied to the restitution obligation, and the amount disbursed to the victims. For the purposes of the measure, separate restitution “accounts” (multiple victims/payees) can be aggregated into a single balance.
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Figure 2 CourTools Measure 7 Reporting Period Example
By examining payments received within the reporting period, and categorizing payments according to their age, one can see how long the obligation has been outstanding. When this is performed regularly, one can see whether policy and operational changes (e.g., different colloquy in the courtroom, notices sent, show-cause proceedings instituted) are producing results. Collecting the number of payments also will allow calculation of average payments, which will lead to some understanding of the dynamics of payments by defendants. CourTools Measure 7 identifies eight essential data elements: 1. Case number 2. Date of the order of sentence 3. Due date for final payment of the total monetary penalty
4. Total monetary penalty in the case 5. Amount of total monetary penalty received (collected) to date 6. Total amount of restitution ordered in the case 7. Amount received that is applied by the court to restitution 8. Amount of restitution received that is disbursed to victims Following this procedure will result in calculating the preliminary compliance rate: the total monetary penalties that were collected as actual dollars. Courtroom realities include conversion of fines and fees to jail served in lieu of payment and community service. Subtracting these adjustments produces the overall compliance rate.
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Current Practices in Collecting Fines and Fees in State Courts: A Handbook of Collection Issues and Solutions, Second Edition This section was written by Alphonso Jefferson, Jr., Support Services Department Administrator, Office of Lydia Gardner, Orange County, Florida, Clerk of Courts Administration. 3
• • • • • • • • •
Collections within a Certain Time Period The basic approach to collection measures is to capture the amount of revenue that has been collected within a certain time period. Figures are normally expressed in dollar amounts and are calculated separately for each revenue source. This process allows for organizations to fully understand how collection activities are affecting the revenue source rather than as an aggregate. The following is a list of measurements that can be used to evaluate the performance of a revenue collection system: • • • •
Current year’s versus prior year’s collections Dollar value of collections Total amount collected Number of cases assigned to collections
• • • • •
Age of collections Collection rate Cost per transaction Cost of collections Electronic transaction turnover Average collection period Collection effectiveness index Prior month past-due collection rate Active customer account (cases) per collection employee Operating cost per employee Operating cost per transaction Productivity Cost-benefit Return on investment
For explanation of the meaning and the calculation of the measures listed, please refer to Table 13.
Table 13 Performance Measure Definitions Measure
Definition
Formula
Current year versus prior years’ collections
This measure compares collection activity for the current to prior years’ activity.
Dollar value of collections
This measure identifies cases that have amounts outstanding receivables to be collected on. This measure identifies the total amount of dollars collected. This measure identifies cases that have been assigned for collection. This measure identifies the age of receivables and the time frame in which they were collected.
Total amount collected Number of cases assigned to collections Age of collections
Collection Rate
The collection rate is the total of all collections related to the assessment control group divided by the actual assessments of the reporting period. A high percentage rate indicates how effective the program.
3
Reporting Frequency
Total amount collected for current year and prior years. Dollar value of collections
Monthly
Total amount collected
Monthly
Number of cases
Monthly
Age of collections – Normally recognized in increments of 30, 60, 90, 120 or more days Total amount collection / (Total amount assessedadjustments to assessments)
Monthly
Monthly
Quarterly
One source used in the development of this material was the Government Financial Officer’s Association (GFOA) at www.gfoa.org. National Center for State Courts
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Table 13 (Continued) Performance Measure Definitions Measure Cost of collections
Electronic transaction turnover
Average collection period Collection effectiveness index
Definition
Reporting Frequency
Formula
This measure identifies the total amount of cost associated with collection efforts that is provided by the organization. This measure calculates the percentage of transactions that are processed electronically. The higher the percentage, the more effective the use of technology.
Total cost of collections
Annually
Number of electronic transactions processed / Number of total transactions processed
Monthly
This measure identifies the average days to collection outstanding receivables. The lower the number, the better the collection activities. This percentage expresses the effectiveness of collection efforts over time. The closer to 100 percent, the more effective the collection effort. It is a measure of the quality of collection of receivables, not of time.
Sum of number of days / Number of days
Monthly
(Beginning receivables + (Credit sales/N*) – Ending total receivables / Beginning receivables + (Credit sales/ N*) – Ending current receivables) X 100 *Where N = Number of months or days 1 – (Current month’s past-due age categories / Beginning receivables of prior month)
Monthly
Prior month past due collection rate
This percentage expresses the amount that has been collected in the current month of the prior month’s past-due amount.
Active customer account (cases) per collection employee Operating cost per employee
This figure represents the total number of cases per employee. This figure illustrates the volume that is assigned to employees. This figure represents the total dollars spent per employee. The lower the cost, the more effective use of technology and people. This figure represents the total dollars spent per transaction. The lower the cost, the more effective use of technology and people. This calculation can be used to evaluate individual systems associated with the collection process.
Number of active cases / Number of collection staff assigned Operating cost / Number of collection staff assigned Operating cost / Number of transactions processed
Annually
This figure represents the productivity level of staff assigned to the collection activity. The higher the amount, the better. A process by which you weigh expected costs against expected benefits to determine the best (or most profitable) course of action. This figure represents how effectively an organization uses its capital to generate gains. The higher the ROI, the better.
Outputs / Inputs
Monthly
Benefits / Costs
Annually
(Gains-Cost) / Cost
Annually
Operating cost per transaction
Productivity
Cost-benefit
Simple return on investment
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Monthly
Monthly
Annually
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Performance measures are most effective when they align with the overall organization’s strategic plan. This allows for specific objectives to be met that are understood by primary stakeholders. An organization is best able to achieve these requirements when measurement is part of the roadmap. A performance measure should be accurate, relevant, and actually used within the organization. Performance measures also help local officials evaluate services and demonstrate accountability to city councils and the public. Measuring performance in areas that matter most to stakeholders is critical to improving communication with the public and demonstrating accountability for the limited resources available. Practice Tips Baseline Information and Testing Effects of Management Actions Before starting a collection program, managers need to collect baseline information for a comparison basis . If a manager wants to test, for example, the effectiveness of sending delinquency notices, a historical basis is needed to determine if the procedure increased collections. Ideal baseline information will include numbers of accounts as well as dollar amounts. One method for creating baseline data is using a control group. A manager can select a representative random sample of “old” unpaid cases, do a notification campaign on half, leaving the other half as a control group. The effect of sending notices to one group of cases can then be compared to collections in cases that received no notice. As an example, a judge in one court used a simple process that can be adapted to any court with a manual or less-sophisticated automated management system. To test the efficacy of a new collection strategy (a series of monthly collection letters), the judge randomly selected a group of about 100 cases with overdue fines on which to test National Center for State Courts
his plan. Another similar group was selected as a control. Manually tracking the response to his efforts in the test cases, as well as payment rates for the control group, was not difficult or timeconsuming and provided clear proof that the strategy increased collections. Similar samples can be made at regular intervals to ensure that a collection program continues to be effective. Sampling also should be done to test any new techniques a court may be considering. One danger in developing management information is creating too many reports, reports that are difficult to understand, or reports in which no one has any interest. For these reasons, the overall goals of the collection plan must first be established, and information must then be developed to report on those goals. The court should format reports so that a disinterested party will find them interesting and easy to review. Continuous Monitoring of Collection Results In general, an effective information-tracking system should be available to the collection program continuously. Depending upon the court’s collection goals, the following information may be generated to assess status or progress: 1. An exception report of cases 30, 60, and 90 days past due. This report tells the court how old its collection caseload is and can be used to trigger application of the next progressively coercive method of enforcement at a predetermined time. 2. A report showing cases of a specified age or with a lack of activity (addressee moved, no forwarding address). This report can help determine whether a case should be released to a private collection agency or declared uncollectible and written off. 3. The number of pending open fine accounts, including the age and status of the case. 4. Average/median times required to collect in full by case type. 5. The number of collection letters that have been returned undelivered.
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6. The number of accounts (payment plans) closed in a month and year. 7. Total monies received, including locally retained funds and funds mandated by the state. 8. The number and percentage of cases in which fines have been fully collected within specific periods of time following their imposition (i.e., 17, 8-14,15-21 days, etc.). 9. Percentage of total amount imposed that has been collected by month and year, to determine the seasonal pattern. Number and amount of payments collected by specific procedures: (a) mail-in payments (b) payments at the counter reminder (c) notice for delinquent payments and the payments received (d) phone notifications and the payments received (e) bench warrants issued
Calculating Cost of Collections A manager can determine the cost per financial transaction by reviewing each receipting process and conducting a time and motion study to identify each step in the process, who is involved, the amount of time needed to complete the step, and the out-ofpocket and operating cost of each mode of receiving revenue. In 2008 the Orange County, Florida, Clerk of Courts found the “point of sale cost” of the methods they use to receive payments, as follows: • •
• •
An ideal system would generate all of this information; but typically some portion of these indicators can be reported from the financial system and loaded into a spreadsheet for further manipulation. This information will help staff manage collections and determine the effectiveness of different techniques used to improve collection. Most court financial management systems capture only dollar amounts, which are important for revenue reporting and “political” purposes. Determining the number of accounts receivable, on the other hand, is more important for collections management purposes. A high aggregate dollar amount of collections for a month may be the result, for example, of seasonal variation, or a single large atypical restitution or fine payment.
•
Internet payments, where the defendant pays a convenience fee: $0.13 per transaction Payments received through a check-cashing business under contract with the county (AMSCOT), where the customer pays $1 per financial transaction: $0.43 per transaction Payments received through Western Union: $0.43 per transaction Payments through phone payment system, where the customer pays a $3.99 convenience fee to the money transfer service Link2Gov: $0.43 per transaction Lockbox at bank, with no fee to customer: $0.43 per transaction
A jurisdiction can calculate its marginal cost of collections (the cost associated with collecting a dollar) by dividing the cost of collections (labor and other expenses) by the amount of collected receipts. The Orange County Clerk’s overall cost of collections over an eight-year period was $4.6 million, and collected receipts of $75 million, at a cost of about $0.06 of every dollar received. The Montgomery County, Texas, Collections unit’s cost of collections was $700,000, and collected receipts of $12 million, at a cost of about $0.06 of every dollar received. The Arizona FARE program collects approximately $30 million per year with a budget of $1.2 million, at a cost of about $0.04 of every dollar received.
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Chapter 12 OTHER ISSUES RELATED TO COURT COLLECTIONS 12.1
Legislative Issues
Some collection practices may not be instituted without supporting legislation, while others may require a court rule. A jurisdiction should obtain legal advice, as variations occur across states. Nonrenewal of Motor Vehicle Registration and Driver’s License Hold Some jurisdictions can suspend vehicle registrations or render them ineligible for renewal for failure to pay parking tickets, or place a hold on the owner’s driver’s license. Similar provisions for failure to pay traffic citations also would create effective motivation to pay moving violations. The argument against such legislation is that many drivers, particularly spouses and dependents, need to use vehicles that are not registered in their names.
At the federal level, in 2009 Congress was considering the latest of several bills introduced. If such a bill becomes law, it is likely that courts will certify the debt to the state’s general revenue office, and delinquent fines and fees will be added to the state’s list of obligations to the federal program that intercepts federal tax refunds for unpaid childsupport debt. Intercepted refunds would go to the revenue office who, in turn, would return it to the courts. Most state administrative offices of the court already have this arrangement, but there are some that do not return anything back to the state courts. Further information on federal legislation can be obtained from the NCSC’s Government Relations Office.
Income Tax and Other Offsets Similar to income tax refund setoffs for delinquent child support, a number of states have enacted a law allowing jurisdictions to report unpaid fines and fees to the department of revenue for offset against state tax refunds and lottery and gambling winnings. Copies of statutes from other states as examples are available from the NCSC.
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12.2
Since appointed counsel usually are compensated at below market rates, these individuals are better off with an appointed attorney, even if they are required to assist substantially with defense costs.
Cost Recovery of Indigent Defense
Many jurisdictions are struggling with escalating expenses for counsel provided to indigent criminal defendants. Many court officials noted that unpaid counsel fees are one of the major collection problems faced by their courts. In most jurisdictions, counsel fees are costs ordered following conviction. Thus, the order comes at a point when the defendant, who often has been sentenced to time in jail or prison along with a fine, is least able to pay the costs related to representation. Enforcement tools for costs often are more limited than for fines. In particular, many courts cannot issue a warrant for nonpayment of costs, including appointed counsel fees.
A shift to prepayment of counsel fees involves a significant change in how a court system views a defendant’s responsibility for the costs of his or her defense. It is not expected that any court will easily embrace such an important change. The issue may be explored as a means of helping to restrain growing costs and enhance collectability of these amounts.
Some jurisdictions have made a philosophical shift from viewing counsel fees as an aspect of the penalty imposed on those convicted. Instead, counsel fees are considered a cost of defense for which financially able and qualifying defendants are asked to contribute, similar to the expense incurred by those who hire private attorneys. Defendants are ordered to pay toward the cost of their defense according to their ability before trial or other case disposition. Financial screening and payment toward counsel costs at the beginning of a case has obvious advantages for the court system, since a defendant is more likely to have the financial means to contribute to the costs of defense. Additionally, under a preconviction model, contribution toward indigent defense costs are spread among all appropriate users of appointed counsel, not just those who are convicted. The process also has advantages for defendants. First, screening coupled with income guidelines will ensure enhanced consistency and fairness in the amounts ordered to be paid. Second, borderline defendants who may now narrowly fail to qualify for counsel appointment may be eligible if required to pay all or most of their counsel fees. - 94 -
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12.3 Centralized Traffic and Government Collection Units
12.4 Fine Amnesty
A few states have instituted statewide trafficviolation bureaus that process all traffic infractions and handle fine enforcement. The central approach, with the economies of scale offered by a large operation, has been particularly effective in states that previously processed traffic cases through many small courts. Some states maintain central governmental collection agencies to collect amounts owed to state agencies, including courts. The courts pay a set annual fee to support the government collection agency.
National Center for State Courts
Fine amnesty programs have helped bring in substantial revenue and close delinquent cases in a number of courts. Amnesties are most effective when an incentive can be offered to inspire payments (e.g., waiver of interest, late fees, or costs). The level of incentive must be carefully considered. It should generous enough to encourage a substantial number of payments while not cutting too greatly into revenue. Amnesties may create more problems than they solve, since many defendants will wait for the next amnesty if there is any indication that another one may be offered. In addition, amnesties should be coupled with strong fine enforcement efforts. There is little reason to pay voluntarily during an amnesty if public perception is that the court is not going to enforce the fine anyway. Instead of an amnesty program, a court may first try a mass mailing to all delinquent accounts, see Chapter 13, “Sample Collection Strategies”. Particularly for a court with a weak history of fine enforcement, a strong demand letter may generate as many payments, without the disadvantages of an amnesty.
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Chapter 13 SAMPLE COLLECTION STRATEGIES The following sample programs are based on successful collection programs observed in a number of courts. 13.1 Sample Program 1: Payment-on-Day-ofSentencing Program Requiring payment on the same day as sentencing for traffic, misdemeanor, and felony fines is an inexpensive way to improve collection of fines and fees. The courts with the best collection rates use this policy. Success will require that all or most judges use the same methods.
sentencing. Some courts have signs notifying defendants that fines are expected to be paid the same day. Defendants should be given a notice of any future hearing date and the list of consequences that the court has the power to invoke if the defendant does not pay. Consistency is important to success. Unless all or most of a court’s judges agree to notify defendants of the policy of “payment on date of sentencing,” the likely result is forum shopping for more-lenient judges.1 Members of the court are in the best position to draft a few sentences that the court can agree to use.
The court needs to make payment an immediate matter in the lives of guilty defendants by communicating this message at the following opportunities:
Exceptions to Same-Day Payment Policy An answer of “no” to the question “you will be able to pay today, won’t you?” raises the issue of how to deal with exceptions to the same-day payment policy. Unless the court controls this moment, every defendant who believes there is a means of avoiding immediate payment will exploit the opportunity. Of the options available, maintaining the position that payment is due and the defendant will have to either find the money or risk the consequences of nonpayment is probably the better course to take in the courtroom.
When the citation is issued through information provided with the citation When the defendant appears in court, either at the clerk’s office or in the courtroom When the defendant receives any written notice from the court concerning payment of the fine
One court with an excellent collection rate for traffic cases never formally approves an extension of time to pay. Defendants are advised that under state law a license suspension cannot be completed until the fine is 30 days overdue, providing those with difficult circumstances an informal grace period.
Communicating Collection
• • •
the
Court’s
Attitude
toward
Courtroom Communications The court has five opportunities to communicate “payment on date of sentencing”: (1) orally and/or in writing at the initial hearing or pretrial, (2) orally and/or in writing at the probation screening, (3) orally during mass admonition at the beginning of the docket, (4) orally upon sentencing of every defendant, and (5) in writing by handing the defendant a fine-payment due date following
How does a judge recognize when an exception should be made to the same-day payment policy without colloquy with the defendant? One way is to institute the screening function (“in-house collection unit”) described in Chapter 6. The screening staff position has different names in different jurisdictions: a collection investigator, judicial enforcement unit, or a probation collection officer. Staff members collect information about defendants
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by requiring completion of a financial affidavit and interview. Filling out the affidavit and waiting for an interview may be enough to discourage some defendants from seeking a delayed payment. They are likely to be individuals with resources who do not wish to disclose their financial status. Some courts allow the collection unit staff to set terms of payment. State law may require judges to determine the sentence, including the terms of payment and whether a defendant qualifies for a deferred or installment payment. If the duty cannot be delegated, a court can create a “special master” with power to recommend payment terms subject to court approval. Screeners also assume collection enforcement duties. Following default, collection unit staff telephone the defendant at work or at home, and send notice of sanctions to be applied if payment is not made. If the defendant still fails to pay, the collection unit may suspend the defendant’s driver’s license, garnish his or her wages, or issue an arrest warrant. A primary purpose for same-day payment is to avoid repeat appearances for payment hearings. One referee observed conducting a traffic docket does allow an additional 30 days to pay upon request for fines over $25. However, the court imposes a $10 late fee to discourage delays. Courts in another state assess a $12 fee for establishing a delayed payment arrangement. The fee must be paid on the day of sentencing. Extensions are an acceptable practice if they do not encourage defendants to appear in court repeatedly, clogging dockets and wasting valuable court time.
National Center for State Courts
13.2 Sample Program 2: Reducing a Backlog of Account Receivable
Every court has some inventory of uncollected fines and fees, which should undergo screening. Whether the court does this in-house or refers these cases to some outside agency, the procedure is the same. The names, addresses, and amounts owed can be entered into a simple PC-based database system to facilitate preparation of address labels and tracking of responses. The court can send a letter stating the amount owed and demanding payment or appearance at a hearing. Mail sent to the last known address with “ADDRESS CORRECTION REQUESTED” stamped or printed on the envelope will automatically be forwarded if the address has been filed with the postal service. The postal service also will then provide new addresses to governmental agencies upon request. Some percentage of letters demanding payment will be returned by the postal service. Court staff can either attempt to find those defendants or turn those accounts over to a collection agency. Addresses on letters that come back undelivered can be checked in a variety of ways: through a law enforcement system, a new warrant, or the driver’s license file. Many delinquent defendants don’t file address changes, or they use relatives’ or friends’ addresses, and thus are difficult to track. Demand letters not returned presumably were received, and some percentage of defendants will pay or appear at the hearing as required by the letter. Active collection can be pursued with this group. Defendants who apparently received the letter but did not respond are more problematic. Additional effort will be required to obtain a response from them, and some percentage of these fines will become uncollectible.
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A mass mailing is a good mechanism for launching a new fine collection program. It identifies uncollectible accounts and accounts more appropriately handled by a private collector, eliminating the need for further court action. More importantly, courts that use this process report significant success. In all cases, the revenue generated exceeded by several times the expense of the program. Many courts have found a multi-contact approach effective in reaching defendants who have not made payments for some time.
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CONCLUSION Courts can receive significant benefits from many of the methods discussed in this handbook at little or no cost. For example, emphasizing immediate payment appears to improve collection rates and require no additional court time or resources. Sameday payment requirements almost certainly reduce a court’s overall collection costs by eliminating the need to force compliance in many cases.
More importantly, any court with a poor collections record should consider the message to the public “a fine unpaid is a lesson unlearned.” The philosophy of several judges interviewed is that fine enforcement, particularly for first-time offenders, is an opportunity to teach social responsibility and prevent criminal behavior. If a court fails to enforce fines for lesser offenses, many defendants will depart the legal system with a belief that the consequence of breaking the law is, perhaps, some minor inconvenience.
While low-cost or no-cost strategies appear to increase collections, courts that added resources for fine and fee collection have found that the expense is more than compensated by even greater revenue increases. Improved technology and use of collection investigators are justified by faster and higher payments, both in total and on an individualcase basis. Savings are realized by using in-house collections rather than hiring a private agency, with the added advantage that a court retains full control over its caseload. Although some collection methods require an investment of staff, facilities, or software development, most require only one critical element: a court leader’s time and commitment. Effective and efficient collection of fines and fees will continue to be an important issue for courts throughout the country. While the emphasis in collections should not be on enhancing a jurisdiction’s revenue stream, the reality is that funding authorities will be tempted to view courts as “money-making” operations. In many localities, pressure on courts to pay for themselves is likely to increase. Courts that fail to improve and document the success of operations in this area are likely to be the targets of criticism from the legislature, media, and public.
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National Center for State Courts
A nonprofit organization improving justice through leadership and service to courts John T. Matthias Principal Court Management Consultant
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Daniel J. Hall Vice President Court Consulting Services National Center for State Courts 707 17th Street, Suite 2900 Denver, CO 80202
WWW.NCSC.ORG Phone: (303) 293-3063 Fax: (303) 296-9007 Toll Free: (800) 466-3063
Laura Klaversma Court Services Director
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