New York May Hire Additional Debt Collectors

The Empire State's newly elected governor, Andrew Cuomo, who has a long history of standing up for consumer rights, may face difficult questions in regards to New York's tax policies.

The state's collection agency is currently planning to outsource tax collection in order to return more taxpayer money for 2010, something he may not be able to hinder once in office.

The outreach to private debt firms began last year, and New York may soon be awarding the contract, The New York Times says. The collectors will then begin reopening $425 million worth of cases that have been deemed uncollectible by the state.

"It’s a huge decision for a state or city to make the decision to retain a third-party debt-collection agency, because it is new and it is going outside their comfort zone," Rozanne Andersen, chief executive of the Association of Credit and Collection Professionals, told the Times. "[It] can be a prescription for disaster in terms of making the program unsuccessful."

The strategy could be lucrative for the state, despite consumer complaints. Third-party debt collectors helped the federal government recoup over $800 million in 2009.