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Debt Collectors Are Going After Kids' Lunch Money

By       Message Roger Shuler     Permalink
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Cross Posted at Legal Schnauzer

We have reported on a number of low-down debt collectors, including some that we have encountered personally. But we might have a new leading candidate for our Lowest of the Low Award in the debt-collection industry.

Commercial Acceptance Co. of Shiremanstown, Pennsylvania, has made a proposal to collect delinquent lunch-money accounts for the Hazelton Area School District. The plan is so slimy that even an industry blog is squirming about it.

All is not dark, however, on the debt-collection front. Another debt-collection firm made a proposal that might actually assist low-income families in the Hazelton district. And on the national scene, a number of recent news items indicate the public might be getting fed up with rapacious debt collectors.

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What is going on with one Pennsylvania school board and delinquent lunch-money accounts? Here is how the Hazelton Standard Speaker reported it:

The board entertained a proposal last month from Commercial Acceptance Co. of Shiremanstown, which would pursue collections from the top 35 accounts with the highest unpaid amounts. District food service director Barbara Farley said lunch money delinquencies total more than $3,000. The collection agency would keep 30 percent of any amount collected and return 70 percent to the district food service department.

The board postponed action on the proposal in favor of scheduling a question-and-answer session with a representative of the company.

Even the folks at industry blog seemed almost appalled by the proposal. ARM, by the way, stands for accounts receivable management--a polite term for "we're coming after your money, whether we can prove you owe it or not." The lunch-money proposal in Pennsylvania called for an "introspective moment," says insideARM.  Gee, even these clod heads can see a public-relations train wreck in the making:

The Hazelton, Pa.-area school district currently has about $3,000 in unpaid lunch fees. To recoup this money, the Hazelton school board is testing the waters with several collection agencies.

This is one of those situations where reality -- there are few school districts that can afford not to pursue three grand -- brushes up uncomfortably against perceived reality: collection agencies are going after kids for their lunch money. Regardless of how much we may want to shift the conversation, this one is ripe for shifting back by those who only have negative things to say about the accounts receivable management industry.

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What does it take to turn the debt-collection industry's stomach? A plan to go after kids' lunch money apparently will do it. Writes insideARM:

Most of the agencies chomping at the bit for this account are suggesting a 70/30 profit split, with the school district taking the bulk of the collected monies home. The current debt of $3,000 seems like a small amount -- and any agency's cut will only run somewhere in the $900 range. However, it's likely that this is a slow-and-steady sort of arrangement, where a firm that successfully wins this collections bid would have a guaranteed account.

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I live in Birmingham, Alabama, and work in higher education. I became interested in justice-related issues after experiencing gross judicial corruption in Alabama state courts. This corruption has a strong political component. The corrupt judges are (more...)

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