Being labeled as controversial is likely never a good thing, especially when you’re a collection agency.
But a local news publication in Rhode Island has used that adjective to describe Transworld Systems, which just entered into a contract with the Cranston (R.I.) School Department to help collect unpaid school lunch debts.
What substantiation does the publication use to make its claim that the agency is “controversial”? Reports from last year related to a $2.5 million fine the company was ordered to pay by the Bureau of Consumer Financial Protection related to lawsuits filed attempting to collect on unpaid student loans, and a report about how the agency was hired by a school board in Georgia in 2010 to collect on unpaid school lunch debts. The issue there? The school district was in a low-income area and was cash-strapped.
The school district in Cranston has written off nearly $100,000 in unpaid lunches this year and has a balance of $45,000 in unpaid lunches for the first three months of the 2018-19 school year already. The district put out a Request for Proposal and selected Transworld Systems. The contract starts Jan. 2.
Prior to hiring the collection agency, the school district’s collection procedures consisted of sending letters to parents asking them to pay the debts. The letters had “very little success,” the school district noted in an email to parents.
On the face of it, it appears as though the article is nothing more than an attempt to create a “controversy” where one does not necessarily exist. The school district has a problem with unpaid debts, it puts out an RFP, and hires the collection agency it either deemed to be the best fit or that offered the best terms, or both.