| Often considered complex and in turn, frequently overlooked, legal proceedings can be a powerful tool to accelerate loss recovery and reduce internal costs when used effectively. Baycorp Advantage’s Legal & Field Services team offers a complete solution for clients looking to incorporate legal proceedings into their loss recovery processes. New Zealand’s Waitomo District Council is one such customer who now sees the legal business unit as an integral part of its everyday business.
In a black hole
The Waitomo District Council (WDC) covers an area that is large in land mass but small in populace with a population of around 9,400. Annual rates total approximately NZ$6.6 million and are collected from 4,500 rateable properties around the region. In November 2002, the WDC appointed Baycorp Advantage as its full-time collection agency, at which time total rates arrears had escalated to NZ$2.4 million.
Legal & Field Services’ pivotal role
Previously, the council had attempted to collect its own rates arrears, however its processes proved inconsistent from one ratepayer to the next. Having exhausted all possible options and confirmed the inefficiency of its collection strategy, the WDC then employed Baycorp Advantage’s Legal & Field Services team to assist with the recovery process. “At that point, the rates debt was at least two years old and escalating, both in penalties and rates charges,” said Mrs Christine Mans, Finance Manager for the WDC.
Glowing results
Since November 2002, the Baycorp Advantage Legal & Field Services team has collected close to NZ$1 million in arrears, reducing the council’s total rates arrears to NZ$1.4 million, and a further NZ$108,000 was collected in January 2004.
Baycorp Advantage has assisted the Waitomo District Council to change the payment culture of its arrears clients. Prior to the change in collection strategy, the council ranked at the bottom of any rates debtor’s list of priorities, whereas now it mostly features as the number one priority. “Ratepayers with a consistent payment history are extremely happy as they are no longer subsidising those who don’t pay,” said Mrs Mans.
Rates legislation is prescriptive in the way rates can be legally collected and the process is very time-consuming. Baycorp Advantage worked with New Zealand’s Local Government (Rating) Act 2002, and the courts system to expedite recovery of the debt.
Mrs Mans commented: “The council is delighted with the exceptional results evident over the past 12 months – the reduction in arrears proves that our tighter credit policy has worked, together with the help of Baycorp Advantage’s Legal & Field Services team.”
For more information on how the Legal & Field Services team can help you, please contact your account manager.
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