Old Debt Problem

Mistaken Identity Scenario

Collecting on the Uncollectable — The Old Debt Problem stems from old, outdated identities.

Government agencies assume they cannot collect old debt if it is more than two years old. Old debt owed to government agencies often involves an identity in the government system that is a static identity, when in reality the identity is dynamic and has been evolving over time.


  • “In a recent test of a file containing 16,000 debtor identities, 4% of the identities in the file had changed in just 6 weeks.”
    - Scott Straub, Federal Civilian Strategic Market Planner for the Government Business Division, LexisNexis Risk Solutions

  • Fact: After 5 years, 60% of the identities on record will be inaccurate. That means that out of every 100,000 people who have an outstanding debt in year one, only 40,000 will be reachable through their original information within five years’ time.

  • Fact: There is at least $400 billion in old debts nationwide including federal, state and local.

In the collections world, these identities were real at one time, but for some reason--simple mistakes like spelling errors, transposed social security numbers, or addresses that are no longer current--the identity in the system who owes the debt does not match the identity in real life. Because of that, the agencies can't collect money that is owed, often adding up to hundreds of millions of dollars. Without accurate information on the identities, they can't refer these debts out to collection bureaus, or collect the debts via their offset programs.

Often, the individuals have moved to another state or simply haven't forwarded their new address. Ironically, smaller governments face bigger problems” think about red light cameras and parking tickets. It is very difficult for local government agencies to figure out how to bill these and who owes the bill.

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