Case Studies

A multi-state utility provider serving communities across the Midwest had accumulated over 45,000 delinquent accounts totaling approximately $4.3 million in unpaid water, electric, and gas bills. The utility's internal collection efforts had been limited to late payment notices and service disconnection threats, with minimal follow-up after accounts were written off. Average account balances ranged from $50 to $2,500, with the majority clustering between $75 and $400 — a range that made individual legal action impractical but represented significant aggregate revenue.

The utility needed a collection partner experienced in municipal and utility collections who could navigate the complex regulatory environment governing public utility debt recovery, including state-specific disconnection rules, customer hardship protections, and public records requirements. The utility board also required detailed reporting for regulatory filings and public accountability.

Adding complexity, the utility's customer base spanned both urban and rural communities across multiple states, each with different consumer protection statutes governing utility debt collection. Some jurisdictions imposed specific timing restrictions on when disconnection-related debts could be pursued by third parties, while others required enhanced disclosures about available hardship assistance programs. The utility's previous attempt to use a generalist collection agency had ended poorly — the agency's form letters failed to include required state-specific disclosures, generating regulatory complaints that the utility's compliance officer had to address personally.

MSB deployed its municipal collections team — specialists experienced in government-sector debt recovery and the unique regulatory requirements that apply to public utilities. Our approach began with a comprehensive data analysis of the 45,000-account portfolio, segmenting accounts into priority tiers based on balance, age, customer payment history, and geographic factors.

High-probability accounts received multi-channel outreach combining demand letters, phone contact, and email. MSB's collectors contacted customers within business hours using professional, non-threatening language that emphasized the utility's preference for resolution and offered convenient payment options including online payment, phone payment, and installment plans. Medium-probability accounts received letter campaigns with phone follow-up for responsive contacts. Low-probability accounts were placed on automated letter sequences that need minimal resource investment.

Our state-by-state compliance review identified two jurisdictions with recently enacted customer hardship protections that the utility's previous collection partner had not incorporated into their processes — a gap that could have created regulatory exposure. MSB's reporting was customized to meet the utility's board reporting and regulatory filing formats, with drill-down capabilities by service territory, account age, and balance range.

A state-level government agency responsible for administering workers' compensation benefits across its jurisdiction had identified over $3.8 million in overpayments made to claimants over a five-year period. These overpayments had accumulated due to a variety of factors: claimants who returned to work but failed to report income changes, benefits paid beyond the approved duration due to administrative processing delays, duplicate payments resulting from system migration errors, and benefit calculations that were later revised downward after medical re-evaluations.

The agency's internal recovery efforts had been largely unsuccessful. With a small finance team already stretched thin managing current claims, the staff could dedicate only a few hours per week to overpayment recovery. Their approach — sending a single demand letter followed by sporadic phone calls — had yielded a recovery rate of just 4% over two years. The agency lacked specialized collection software, skip tracing capabilities, and the legal infrastructure to pursue reluctant overpayment recipients. Additionally, the political sensitivity of collecting from injured workers created internal hesitancy about aggressive recovery efforts, even though the agency had a legal obligation to recover public funds.

The agency needed a collection partner with specific experience in workers' compensation collections — a niche that requires understanding of workers' comp benefit structures, overpayment calculation methodologies, state-specific recovery statutes, and the sensitive human dynamics involved in collecting from individuals who have experienced workplace injuries. The partner also needed to meet strict government procurement and reporting requirements, including detailed audit trails and compliance with state open records laws.

Further complicating the recovery effort, many of the overpayment recipients had changed addresses since their workers' compensation claims were closed. The agency's records contained outdated contact information for approximately 40% of the accounts, making initial outreach impossible without specialized skip tracing capabilities. Some claimants had relocated out of state, raising questions about jurisdictional authority and the applicability of different state statutes governing overpayment recovery. The agency also faced a statute of limitations concern — under state law, the window for administrative recovery of certain overpayment types was approaching expiration, creating urgency to begin a structured recovery program before legal options narrowed further.

MSB deployed a specialized team with extensive experience in government-sector collections and workers' compensation recovery. Our approach was methodical, compliant, and designed to balance effective recovery with the sensitivity required when dealing with injured workers.

Phase 1 — Data Analysis & Segmentation (Weeks 1-3): MSB's data team ingested the agency's overpayment records, cleansed the data to remove duplicates and resolve address discrepancies, and reviewed every account. Accounts were segmented into tiers based on overpayment amount, recency of the claimant's last known contact, employment status, and estimated ability to pay. High-value accounts with strong contact information were prioritized for immediate outreach, while accounts with outdated information were routed through skip tracing to locate current contact details.

Phase 2 — Compliant Multi-Channel Outreach (Weeks 4-16): Our collectors initiated contact through state-approved demand letters that clearly explained the overpayment amount, the legal basis for recovery, and the claimant's options for repayment or dispute. Follow-up included phone calls during approved hours, email outreach for claimants with verified email addresses, and referral to the agency's formal appeals process for claimants who disputed the overpayment calculation. Every communication was reviewed against state workers' compensation statutes and the agency's approved messaging guidelines.

Phase 3 — Payment Resolution & Hardship Accommodation (Ongoing): MSB offered flexible repayment options including lump-sum payments, monthly installment plans scaled to the claimant's ability to pay, and offset agreements for claimants still receiving active benefits. For claimants experiencing genuine financial hardship, MSB worked with the agency to explore compromise settlements and statutory hardship waivers where applicable. This compassionate approach reduced resistance and increased voluntary payment rates substantially.

Phase 4 — Escalation & Legal Referral: For non-responsive claimants with significant overpayment balances, MSB prepared detailed case files and recommended legal referral to the state attorney general's office or approved collection attorneys. MSB's documentation met evidentiary standards for administrative hearings and court proceedings, streamlining the legal recovery process for the agency.