Town Of Smithfield Contracts With Collection Agency

The Town of Smithfield has signed on with a collection agency to try and recover tens of thousands of dollars in unpaid utility bills.   Each year, the Town averages $85,000 in unpaid utility bills.   About $35,000 is collected on closed accounts through a state program called Debt Setoff.  That leaves approximately $50,000 in closed accounts that go uncollected.

Town of Smithfield Finance Director Greg Siler.

The Town Council voted recently to sign a one year contract with Penn Credit Inc. to try and collect from the closed accounts. Penn will charge an 18 percent fee on amounts collected, well below the industry average of 30 percent. They also don’t charge a fee on debts collected through the Debt Setoff program, according to Town of Smithfield Finance Director Greg Siler.      

Siler said a prior collection agency charged the Town 50 percent of the amount collected.  The Town has been without a collection agency for several years and currently does not have the staff to pursue debt collection, he said. 

Siler said the Town will continue to work with customers who have past due account balances.  The contract with Penn Credit is for closed accounts only.  The decision to hire a debt collection agency was the result of COVID-19, rather because of the high number of uncollected account balances. 

The collection company has 30 plus years experience of collecting government debts and offers a web-based client and payment portal.