allgov.com Private debt collection agencies are now making big profits going after those who owe money to government agencies, sometimes collecting far more than the amount of the debt. A CNN investigation found local, state and federal agencies have contracted out collection of unpaid taxes, tolls and parking fines. The debt collectors make their profits by charging debtors huge fees. And since they’re not bound by consumer protection laws, collectors can use more aggressive tactics than usual. Companies working in Florida are permitted by the state to tack on fees as high as 40% of the debt owed. In Texas, the fees can be as much as 30%. “And in cases of unpaid toll violations, flat fees can effectively amount to more than 100%,” CNN’s Blake Ellis and Melanie Hicken reported. “As a result, small unpaid tolls can easily balloon into hundreds of dollars, once government penalties and collection fees are tacked on.” One man in Texas saw a $1.25 toll charge turn into nearly $300 he owed to a collection agency. Tai Vokins, a Kansas attorney and former assistant attorney general, told CNN that the government-hired collectors are “preying on the absolute poorest people” who can’t pay their bills, let alone old debts. Consequently, some have been jailed for not paying overdue speeding tickets, while others have had entire paychecks garnished to cover back taxes.
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