Louisiana’s Office of Motor Vehicles (OMV) has recovered $22.5 million of the projected $444 million owed to the agency as a result of residents with lapsed auto insurance. Now, a new group of drivers are complaining about the state’s Office of Debt Recovery (ODR) being too aggressive and adding fines to their debts.
The ODR gained jurisdiction over the fines in December and now has the authority to pull money from people’s bank accounts, intercept tax refunds and recommend that a resident's state-issued professional license be suspended. Louisiana couldn't use any of those strategies before the state's legislature created the ODR in 2013.
Four months ago, the OMV mailed 1.2 million letters to people allegedly driving without insurance. The mailings became the first bulk attempt to capitalize on ODR's powers and the attempt that captured the most attention.
The OMV’s latest mailing of 696,205 letters came in November with the total including some repeats of the original million-plus letters, said OMV Deputy Commissioner Staci Hoyt.
The ODR has collected on 93,613 records resulting in the $22.5 million collected as of late January. Another 31,812 files were cleared because they related to alleged fines that were not in fact owed, Hoyt said.
The state is currently facing a $1.9 billion budget deficit in the fiscal year that began July 1.
Proponents of the ODR believe it’s a good-faith effort to collect money owed to the government and that Louisiana’s high auto insurance rates stem from the fact that so many of its residents fail to carry insurance as required by law.
Some opponents have said the ODR's approach is suspect and aggressive. They also complain there is nobody to contact directly regarding any errors and that the only way to reach the office is by mailing in a check and signing your name. Louisiana's Department of Revenue spokeswoman Kizzy Payton said the ODR hasn't recommended suspending anyone's license yet, but the agency will soon begin offsetting tax refunds.Karen St. Germain, OMV's newly appointed commissioner, said she understands that the OMV notices can be "unnerving" to some residents but believes the agency is only following the law by collecting debt.
Hoyt says the organization is trying to respond to people's inquiries and concerns by keeping call lines open from 8 a.m. to 6 p.m. on weekdays.