From Collector: A Win-Win Situation

Tips to help you thrive during tax season.

2/2/2018 8:00 AM

NewsCollector Magazine
From Collector: A Win-Win Situation

February is the kick-off month for tax season, a busy time for debt collectors. Many consumers use their tax refunds to help settle accounts and pay down debt, making this time of year full of opportunities for all parties, Collector magazine editor Anne Rosso May reports in the February issue.

The IRS started processing most returns at the end of January, though some consumers’ returns—such as those with an Earned Income Tax Credit—won’t be processed until mid-February. According to a survey conducted by Qualtrics and Credit Karma Tax, 62 percent of Americans expect to get a tax refund in 2018, and 24 percent plan to use that money to pay off debt.

Many debt collection agencies encourage their collectors to bring up tax refunds during conversations with consumers. They may not even be thinking about their refund yet, or it may not occur to them to use it to help pay down their debt, Rosso May reports. Try asking, “Are you expecting a tax refund this year?” or “Have you thought about using your tax refund to pay this?”

Your client might allow you to be more flexible with settlements at this time. Make sure you know what types of settlements the client will allow you to offer the consumer, and how your agency expects you to approach this negotiation—not only what you can offer, but when.

You must be careful not to use language that would indicate this is a one-time offer, which could violate the Fair Debt Collection Practices Act.

Read more tips on working with consumers during tax season, including settlement offers and making sure you’re staying in line with your clients’ expectations, in the February issue of Collector magazine.

Did you know? Tax facts:

  • More than 155 million returns are expected to be filed this year.
  • Consumers have until Tuesday, April 17, to file their 2017 returns and pay any taxes due.
  • The IRS expects more than 70 percent of taxpayers to get tax refunds this year. In 2016, nearly 112 million refunds were issued, with an average refund of $2,895.
  • The IRS expects about 90 percent of returns to be filed electronically.
  • The IRS issues more than nine out of 10 refunds in less than 21 days.

Source: Internal Revenue Service.

The Federal Trade Commission recently concluded Tax Identity Theft Awareness Week and has valuable information you may want to pass on to consumers as well as resources for businesses on its Privacy and Security webpage. Archived webinars for businsses, including Protecting Sensitive Business and Customer Data will be available on the FTC’s website.

ACA International members may find more resources on working with consumers during tax season through the ACA SearchPoint®  library  using the tags Taxes and Identity Theft. ACA International members must be logged in to access the ACA SearchPoint® library.

Related content from Collector magazine:

Sticking Together: Help consumers feel comfortable discussing their personal information over the phone.

Identity Crisis: Four strategies you need to know when dealing with identity theft claims.

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