Questions unanswered over debt collection licence – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

Log In

Reset Password

Questions unanswered over debt collection licence

First Prev 1 2 Next Last
Curtis Dickinson, the Minister of Finance (Photograph by Blaire Simmons)
Gina Stableford, founder and president of OARRS Inc Ltd (Photograph from LinkedIn)

The Government has hired a company which appears not to have a debt collection licence to manage the recovery of millions of dollars of unpaid land tax.

OARRS Inc Limited will be paid 15 per cent of “all land tax arrears recovered” according to a notice published in the Official Gazette about its contract with the Office of the Tax Commissioner, which is part of the Ministry of Finance.

Outstanding land tax owed to the Government was more than $31 million as of March 31, 2018.

It wasn’t possible to get a more recent figure for the debt from the Government or the Auditor-General – but the 2018 amount shows that OARRS would make several million dollars if it successfully recovered all of the unpaid land tax.

Its debt collection consultancy contract began on June 29 last year, when the island was several months into the Covid-19 pandemic and hundreds of people were unable to work.

The Debt Collection Act 2018, which came into force on January 31 last year, says those engaged in the “debt collection business” – defined as those pursuing and collecting a debt – must be licensed.

The Debt Collection Licensing Authority, within the Ministry of Home Affairs, is required to publish a notice of every licence granted.

The Royal Gazette was unable to find a record of OARRS being issued with a debt collection licence.

Nor could we find a record of the contract being put out to tender before being awarded to OARRS.

We asked the Department of Consumer Affairs yesterday afternoon if we could view the register of licensed debt collectors, which the Act states should be available for inspection by the public. There was no response by press time.

Questions put to Government on March 24 about the contract, including whether it was tendered and whether OARRS has a licence to collect debt, have yet to receive a response.

Gina Stableford, founder and president of OARRS, was reached by telephone yesterday, when she said she was not in an immediate position to answer questions.

She gave no response when asked if OARRS had a debt collection licence.

The company states on its website that it offers debt recovery services and uses “relationship-based solutions, strategies and processes” to deliver “exceptional results” on credit and debt management.

The Official Gazette notice lists a company called OARS Limited as having been awarded the contract with the Office of the Tax Commissioner. No such company is listed at the Registrar of Companies and it is thought to be a misspelling of OARRS Inc Ltd, which is a registered company.

The notice says the contract – which runs until June 30 this year – is for a debt collection consultant to provide “ongoing liaison between the Government and taxpayers or their authorised agents with past due land tax arrears”.

The consultant is required to review debtor files to provide background on outstanding balances, agree and document a negotiation strategy for each debtor, manage the debt collection process and provide the Government with a report.

Heather Thomas, the Auditor-General, said in her 2019 annual report that the amount of land taxes greater than 90 days in arrears had risen from $23.2 million in 2013 to $31.3 million in 2018, along with increases in other tax arrears.

She recommended that the Government “establish, communicate and resource appropriately a plan to address the ongoing significant taxpayer indebtedness”.

The Ministry of Finance agreed and said it would “use all available means to collect overdue taxes, thereby improving the Government’s cashflow”.

It added it was “considering ways to supplement and enhance the debt collection function within government and is working through the procurement process to engage relevant service providers that can assist with this matter”.

Last night a Government spokeswoman said: “The Minister of Finance, Curtis Dickinson, will provide an update in the coming weeks on the work undertaken by the Office of the Tax Commissioner to collect money owed to the government that is in arrears.

“If companies and individuals are legitimately not in a position to pay the outstanding taxes, payment plans are being created.”