You may not be thinking about the 2019 tax season yet — but you should be. In fact, now’s the ideal time to start contacting consumers about settling debts using their tax refunds.
Why? Because according to IRS data, in 2018, 72% of consumers who filed a tax return received an average refund of $2,8251. You have an opportunity to capture a piece of that all that extra cash — if you follow this advice.
Don’t wait until March or April to contact consumers
According to IRS data, 50% of all 2018 refunds were issued on or before March 9th 1. If you wait too long, you could miss out on half the opportunities to collect from consumers who receive a tax refund. You also don’t want to hit them when the cash is burning a hole in their pockets. Instead, contact them before they’ve received their refunds.
My best recommendation is that you begin your tax season recovery efforts early. Your collections officers will already be contacting debt-holding consumers and with the holiday season being tough financially, many people will be unable to pay. Arm your collections officers with talking points about how consumers can use their tax refunds in 2019 to get back on track early in the new year.
Clean up your contact information – ASAP
The Fair Debt Collections Practice Act dictates how and when you can contact consumers. To stay compliant, it’s a safer bet to use direct mail to persuade consumers to put their tax refunds toward debt.
The problem is, when you factor in design, production, materials and postage, those direct mail pieces can be become expensive. If you don’t clean up your contact information before you start your campaign, you’re just wasting money.
Before you do anything, refresh your data to ensure you have the most up-to-date, accurate information on consumers delivered via a rapid, seamless batch transfer process.*
Prioritize people who are likely to pay
You can be working with clean data and start your efforts early — and you’ll still spend too much time and too many resources on consumers who refuse to hand over their tax refunds to pay on old debt.
While you can’t abandon trying to collect from those people, you can focus more of your efforts on the people more likely to pay. That’s where TransUnion’s Account Prioritization comes in.
With it, you’ll get insights into which of your accounts have the highest collectability potential. You’ll also be notified when changes occur in a consumer’s credit so you can proactively address treatment strategies.
Start taking steps now to capitalize on the 2019 tax season.
Current customers, contact your TransUnion representative today for more information.
Not a TransUnion customer? Call (888) 503-1216 to get started today.
 Compiled from "Filing Season Statistics for Week Ending October 19, 2018." Internal Revenue Service. Accessed November 15, 2018. https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-october-19-2018
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*While unlikely, there may be instances where results may not be delivered instantly, in real-time or in seconds due to factors outside of TransUnion Risk and Alternative Data Solutions’ reasonable control, including any force majeure event or customer internet access problems.
The TLOxp solution is not provided by a "consumer reporting agency" and does not constitute a "consumer report," as these terms are defined by the Fair Credit Reporting Act, 15 U.S.C. Section 1681 et seq. ("FCRA"). The TLOxp solution may not be used in whole or in part as a factor in establishing an individual's creditworthiness or eligibility for credit or insurance, or employment, nor for any other purpose under the FCRA