Ministry: more time needed for answers on debt collection deal – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

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Ministry: more time needed for answers on debt collection deal

The Ministry of Finance has said it needs more time to respond to a request for records on a multimillion-dollar contract awarded to an unlicensed debt collection company.

Oarrs Inc was awarded the contract to manage a claw back of almost $75 million in unpaid land tax by the Tax Commissioner’s Office last June.

But the agreement is now under review by the Ministry of Finance after The Royal Gazette revealed last Friday that Oarrs had not applied for a debt collection licence, as required by legislation that came into force in January last year.

The licence controversy is also under investigation by the Department of Consumer Affairs, part of the Ministry of Home Affairs.

Walter Roban, the home affairs minister (File photograph by Akil Simmons)

Walter Roban, the home affairs minister, emphasised in the House of Assembly in 2018 that companies involved in debt collection would need a licence under the Debt Collection Act.

The Gazette submitted a public access to information request to the Tax Commissioner’s Office earlier this month for records about the contract awarded to Oarrs, as well as for information on government tax arrears.

The office had until May 20 to issue a decision on whether to release the records – but it said on Monday it needed until June 10.

The Pati officer at the Tax Commissioner’s Office wrote: “The reason for this extension is that dealing with the request within the original period of six weeks would substantially or unreasonably interfere with the day to day operations of the authority and we are currently experiencing resource constraints.”

A notice published in the Official Gazette about the contract said Oarrs would be paid 15 per cent of “all land tax arrears recovered”.

The notice said the contract would run until June 30 and that Oarrs would act as a “debt collection consultant providing ongoing liaison between the Government and taxpayers or their authorised agents with past due land tax accounts”.

It added the firm’s role was to review debtor files, agree and document negotiation strategies used on debtors, monitor compliance, manage the debt collection process and provide the Government with a report.

But John Hindess, a lawyer, said last week that people who got demands from the company for unpaid land tax would be within their rights to question the company’s legal right to pursue the debt.

The Pati request asked for all records on the contract held by Oarrs with the Tax Commissioner’s Office, including, but not limited to, records on the tendering process and ownership of Oarrs, including beneficial ownership.

The request also asked for the start date of the contract, the amount of taxes recovered by Oarrs and the amount paid to the company so far.

It also asked for any reports supplied to the Government by Oarrs.

The majority of questions about the Oarrs contract put to the Government’s Department of Communications have not been answered.

Gina Stableford, the founder and president of Oarrs, did not respond to e-mailed questions.

Cole Simons, the Opposition leader, claimed at the weekend that the Oarrs contract was an example of the Progressive Labour Party government “playing favourites yet again”.

Heather Thomas, the Auditor-General, said last week 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.

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

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Published April 28, 2021 at 8:02 am (Updated April 28, 2021 at 8:47 am)

Ministry: more time needed for answers on debt collection deal

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