The mayor of one Florida town may have just sicced debt collectors on himself.
Steve Bateman, the mayor of Homestead, Florida, owes thousands of dollars in fees to his city’s development services department, which the city may come collect, the Miami Herald reports. That’s because of Bateman himself, who recently voted to expand Homestead’s use of a debt collector to go after residents who haven’t paid their bills.
Though it’s rare that a debt collection company would go after the city officials that hired it, Homestead’s move to do more to recoup its unpaid bills isn’t all that unusual. Local governments, prison systems, school boards and other government entities are increasingly turning to debt collection agencies to get residents to pay parking tickets and court fees, according to CNNMoney. As budgets get tighter, collecting on the outstanding debts is become a larger priority and, in many cases, local governments don’t have the resources to chase the debtors themselves.
The city council in Canton, Ohio, mulled entering a two-year contract with a debt collector in an effort to recoup unpaid water and sewer bills. The contract stipulated that the debt collection company would get to keep 23 percent of the debt it collects.
Chicago officials also considered hiring debt collection companies in 2008 to collect unpaid parking tickets and utility bills, the Chicago Tribune reported at the time. Unpaid water bills accounted for almost $95 million in lost city revenue.
Still, many consumer advocates say local governments should shy away from siccing debt collectors on their residents, given that these companies often use harsh tactics to collect. Debt collectors are ramping up their use of cursing, threats and insults, according to a recent report from Marketdata Enterprises.And increasing numbers of Americans have been subjected to these tactics -- one in seven has been pursued by a debt collector, according to the blog Naked Capitalism.