Louisiana Using New Way to Collect Fines for Auto Insurance Lapses

Louisiana has implemented new ways of collecting fines from people the state believes are driving without insurance.

The Advocate reports the recently formed Office of Debt Recovery has the authority to extract money from bank accounts, intercept tax refunds and recommend that a person’s state-issued professional license be suspended. These are all brand new tactics the state was unable to employ before it was created by the Legislature in 2013.

The state’s Office of Motor Vehicles has capitalized on the Office of Debt Recovery’s powers, as the OMV has mailed over 1.2 million letters to people they say were driving without insurance. OMV Deputy Commissioner Staci Hoyt said the office has collected $22.5 million of the projected $444 million owed to the agency.

Louisiana’s Department of Revenue spokeswoman Kizzy Payton said the Office of Debt Recovery has also collected over $5 million for the OMV since the office gained jurisdiction over the fines on Dec. 15. On that date, the agency took over 555,628 of the OMV’s files, which represent nearly $292 million in OMV debt.

Payton says the agency has sent letters informing people their debts have been transferred to its office. She says the office hasn’t recommended suspending anyone’s license yet, but the agency will soon begin offsetting tax refunds.

OMV’s newly appointed commissioner Karen St. Germain acknowledged that the OMV notices can be “unnerving” to some residents, but says the agency is only following the law by collecting debt.

Hoyt says the organization is trying to be responsive to people’s inquiries and concerns by keeping call lines open from 8 a.m. to 6 p.m. on weekdays.