![]() ![]() If such charges are already appearing on your credit report, you may be able to negotiate their removal in exchange for payment. As government collection activity rises, so does the number of consumers surprised to discover that they’re paying higher interest rates-or being turned down altogether-because the kids lost a library book or they neglected to renew Rover’s license. While not all municipalities use private collection firms, the trend is increasing across the country. Many consumers don’t know that charges like this can affect their credit. A single collection item can drop your credit score as much as 100 points. That’s because collection agencies report delinquencies to the three major credit reporting agencies. The risk to consumers who don’t make those payments in a timely manner, however, is significant. Private agencies typically charge a percentage of the balance actually collected, so there’s no risk to the government. Those dollars can be collected with little investment by the cities if they’re turned over to private collection agencies. For many cities, however, these unpaid fines and fees add up to millions of dollars a year. To each individual Consumer, the fines in question may be very small and Collection actions may seem petty and unnecessary. The proposal will be considered by the council at a meeting next Thursday.As municipal governments increase efforts to collect unpaid parking tickets, dog-catcher fines, library fines and the like, some consumers are seeing a surprising impact-a radical drop in their Credit scores. "If you lose a book or just don't return a book there will still be a replacement cost for that book that will be charged to people, so there's no incentive just to hold onto books forever."Ĭhildren and teenagers up to the age of 18 and borrowers with concession membership are exempt from paying fines at Christchurch city libraries. ![]() "That sounds counter-intuitive, but actually, once people know a book is late there's a bit of a shame factor," she said. Templeton said people tended to return books sooner if they did not attract late fees. Instead fines have become a barrier, particularly for those customers who cannot afford to pay," the report said. "Originally fines were intended to motivate customers to return items to improve access to the collection for other customers. ![]() The report said the removal of fines would improve equity of access for people who could least afford it. "At a time when everyone's going into a lot of detail with people's credit when it comes to mortgages and those kind of things, a small library fine, I have heard, has had an impact on people's ability to do that kind of thing," she said. People's credit ratings could be also affected if they were referred to debt collectors, she said, They'd gone to choose books, and got a big pile, but they weren't able to do that just in case the mum got out adult books on the kids' cards," she said. "Her two daughters who were 10 and 11 years old were only able to get out two books each. Once this happens, they cannot borrow items, put them on hold or access eResources.Ĭouncil staff have recommended getting rid of library fines and writing off all debt from March, at an estimated cost to ratepayers of $300,000 in lost revenue every year, although the move would come with $40,000 in administrative savings.Ī report noted libraries regularly received feedback about fines from people under financial pressure, those who believe rates covered all charges, and borrowers astonished by how much they had been ordered to pay.Ĭouncillor Sara Templeton said library fines could have unintended consequences for families facing financial hardship, like one woman whose $50 library fine blocked her children from borrowing books. Memberships are blocked once people have $30 or more in unpaid fines and charges, or owe fines for more than 21 days. They found return rates increased when fine-free policies were introduced.įines for overdue items are currently charged at 70 cents per day, up to a maximum of $21 per item at Christchurch public libraries. An increasing number of libraries across New Zealand and overseas are scrapping fines, including Auckland, Dunedin, San Francisco and New York. ![]()
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