A report from the city of Chicago’s Inspector General includes details about how a debt collector collected $200,000 in fees from the city for collecting on accounts that were not delinquent.
Deborah Witzburg, Chicago’s Inspector General, included details of that activity in her final quarterly report of 2023, which indicate lapses in oversight at several city agencies and departments.
What Happened: The collector, which the report doesn’t name, improperly accessed the city’s debt collection portal and assigned itself utility debts that were not yet delinquent. The contractor then submitted invoices to the city for its 25% contingency fee as if it had collected on the debt, and subsequently received $200,000 in collection fees it did not earn.
The Recommendation: The Inspector General’s report indicates the city’s Department of Procurement Services initiated proceedings to exclude the contractor from receiving any more business from the city and that its agreement with the contractor was terminated.
- The city’s Department of Finance has taken steps to limit system access to the city’s portal to ensure that other agencies and contractors are not able to repeat this type of activity.
- The Finance Department also withheld other payments that were scheduled to be made to the contractor that it was not entitled to receive.
- Witzburg said in her report that the misconduct stemmed from “inadequate controls” within city departments.
