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Land tax collection firm does not have licence

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A company awarded a multimillion-dollar government contract to claw back land tax arrears does not have a debt collection licence, The Royal Gazette has confirmed.

A new law, which came into force at the start of last year, ruled that anyone “pursuing and collecting a debt” needed a licence if they were not the creditor – and those convicted of operating without one faced a fine and/or jail term.

But Oarrs Inc – awarded the contract by the Tax Commissioner’s Office last June – has never applied for a licence, the Department of Consumer Affairs said.

The company will get 15 per cent of “all land tax arrears recovered” under the agreement, a deal which will net it millions of dollars if it brings in even a fraction of the almost $75 million the Government is owed.

Lawyer John Hindess (Photograph from MDM website)

John Hindess, a lawyer who has done extensive work involving the new law, said that Oarrs could find itself in breach of the legislation if it was engaged in debt collection without a licence.

He said: “I would have assumed that this private entity has the requisite licence to operate but, if it doesn't, then, of course, it has no ability to be engaged in this business.

“The purpose of the Act is to protect the average person from unfair debt collection practices.

“If any organisation or entity allows a private company to engage in debt collection practices without the proper licence, it defeats the purpose of the Act.”

The licences were introduced under the Debt Collection Act 2018, a consumer protection law steered through the House of Assembly by Walter Roban, the home affairs minister.

The legislation also mandated that a Debt Collection Licensing Agency should be set up.

Mr Roban told MPs: “No debt collector can operate without a licence issued by the licensing authority.

“Let me repeat that line just so that it is clear, if I did not make it clear already. No debt collector can operate without a licence issued by the licensing authority.”

The Tax Commissioner’s Office is part of the Ministry of Finance.

The debt collection licences are being handled by the Department of Consumer Affairs, which comes under the Ministry of Home Affairs.

Mr Hindess, of Marshall Diel & Myers, said: “I would think that the Ministry of Finance is aware of the need for a licence.

“They are the ones that have all the debt that needs to be collected.”

It is understood that Oarrs has sent letters to people who owe land tax.

Mr Hindess said people who got the demands would be within their rights to question the company’s legal right to pursue the debt.

Complaints about unfair debt collection practices can be made to the Debt Collection Licensing Authority.

But Mr Hindess said, as far as he was aware, the authority had still to be set up.

He also questioned whether contracting out the collection of land tax arrears was the most cost-effective way to collect the debts.

The Government refused to tell The Royal Gazette earlier this month if Oarrs had a debt collection licence.

It also stonewalled questions about how much Oarrs had collected in land tax arrears so far and how much it had been paid for its services.

A spokeswoman said that Curtis Dickinson, the finance minister, would give an update in the “coming weeks” on efforts by the Tax Commissioner’s Office to collect money owed to the Government.

Questions e-mailed to Gina Stableford, the founder and president of Oarrs, got no response.

The company’s lack of a licence was confirmed after a public access to information request to the Department of Consumer Affairs for records on any application for or granting of a debt collection licence to the firm.

The department said: “The decision … is to refuse access on administrative grounds … because such a record does not exist.

“As of today’s date, Consumer Affairs has not received an application to issue a debt collection licence to Oarrs Inc Ltd.”

Auditor-General Heather Thomas told The Royal Gazette: “I am not in position to comment on the Oarrs contract as yet.”

She said the Government was owed almost $75 million in land tax last year.

The figure was $62.5 million in 2019 and $56.2 million in 2018.

Heather Thomas, the Auditor-General

Ms Thomas said the net receivable balance – the amount expected to be paid – was $42.5 million last year and $30 million in 2019.

A request for further comment from the Government yesterday, including whether it had breached the rules by contracting an unlicensed company to collect debt, got no response.

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Published April 23, 2021 at 1:10 pm (Updated April 24, 2021 at 10:28 am)

Land tax collection firm does not have licence

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