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The ATO maintains that it only uses external debt collection agencies for “straightforward, undisputed debt”, as concerns over the aggressive conduct of their staff linger.
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Tax Office defends use of external debt collection agencies
29 October 2019
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Speaking at the Senate Estimates last week, ATO chief service delivery officer Melinda Smith said the Tax Office sets clear service benchmarks for external debt collection agencies, and only uses them for a “small portion” of its debt collection activities.
“We’re quite deliberate about where in the process we feel comfortable having a debt collection agency engaged and what the processes are for them to do that. There are parameters,” Ms Smith said.
“We have guidance and governance around how they operate and how they’re trained and around the culture and the expectations we have of their staff when they interact with our clients.”
Adding to that, ATO Commissioner Chris Jordan said only straightforward debts would be referred on to these agencies, with the ATO holding on to more complex cases.
“Sometimes those agencies — that’s their business. They’re set up to do that, so they can do that at a lower cost if it’s a simple, straightforward follow-up of an undisputed debt that’s just sitting there,” Mr Jordan said.
“But things that take a lot more effort will tend to stay with us.”
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However, tax practitioners have told the Inspector-General of Taxation and Taxation Ombudsman that they have a different experience, fielding “nasty” calls from these external debt collection agencies.
IGTO Karen Payne, who has yet to reveal her agency’s work program for the current financial year, has hinted at revisiting debt collection as one of the first reviews she undertakes.
The IGTO’s last review of debt collection was back in 2015 following a number of concerns raised by individuals, small businesses, tax and insolvency practitioners as well as their representative bodies.
The tax watchdog’s recent annual report has also revealed that the ATO’s debt collection tactics continue to form the bulk of complaints it receives.
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