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In response to a congressional request, GAO evaluated the performance of four private debt collection firms under contract to the General Services Administration (GSA).
GAO found that agencies: (1) were initially slow in referring their delinquent accounts to the GSA contractors; (2) sometimes included inappropriate accounts in their referrals, such as those owed by deceased debtors, discharged through bankruptcy, or already paid in full; (3) referred accounts that did not contain essential debtor information; and (4) did not always add the contractor's contingent fee to the debtor's account. GAO also found that the contractors: (1) had, by the end of the first year, collected $2.7 million in delinquent debts and obtained about $3.2 million in promises from debtors to pay in the future; (2) generally initiated collection actions in accordance with their contracts; and (3) did not experience any major difficulties in handling the volume of referred accounts.
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