The leader of Louisiana’s Office of Motor Vehicles on Thursday defended its mass mailing of 1.2 million collection letters to drivers for lapsed insurance coverage, saying the effort was aimed at clearing records and wasn’t a “money grab” for a cash-strapped agency.
And Col. Mike Edmonson told a panel overseeing debt recovery efforts for state agencies that a new round of letters would be sent soon to people who haven’t paid traffic fines listed on their driving records.
Louisiana drivers are required to have insurance on their vehicles. The letters, sent earlier this month, were seeking as much as $444 million in fine payments from about 550,000 drivers, with fines ranging from $125 to $525 for each violation of insurance coverage. Some of the alleged insurance violations reach back to 1986.
The collection efforts generated complaints from drivers who said they were being improperly accused of expired insurance on vehicles they’ve sold or on vehicles now registered in other states where they’ve moved. Critics accused Edmonson, the state police superintendent who oversees OMV, of pushing collections to finance a trooper pay raise tied to the efforts.
“This was never driven by any pay raise,” Edmonson said after the hearing. “This was never driven by a money grab.”
Members of the Cash Management Review Board weren’t critical of the collection efforts, but they stressed drivers needed to understand their options for responding to the letters and making their case if they feel improperly charged.
“I understand we’ve got a big backlog there, and there are some growing pains,” said Rep. Chris Broadwater, R-Hammond, who has pushed for state agencies to be more aggressive in seeking payment of back-owed debts.
Edmonson told the board the collection letters were based on lapsed coverage information submitted by insurance companies.
“We’re not after the money unless you owe it to us. But we have to clear the record,” Edmonson said. “We want to work with people. I understand this is overwhelming.”
Likely about 65 percent of those who received collection letters owe OMV money, Edmonson estimated. He said the motor vehicles agency has added phone lines and lengthened hours to help people clear up any improper penalties. Ten OMV offices around the state will be open Saturday from 8 a.m. to 4 p.m. for drivers seeking to remedy their collection notices.
He said OMV also posted an affidavit online that drivers can file to declare if they sold a car, if their car was stolen, if they’ve moved or if they have some other reason to explain the lack of insurance. People should notify their insurance companies, Edmonson said, if they sell a car, move or make other vehicle changes.
About 32,000 records have been cleared so far, with 22,000 drivers paying more than $4 million in penalties for expired insurance and the rest cleared after drivers showed they shouldn’t have been charged a fine.
State lawmakers authorized the enhanced collection effort earlier this year. People who received letters have another month to object to the fines.
Starting Dec. 13, the expired insurance penalties will be turned over to the state’s centralized collection agency known as the Office of Debt Recovery, said Staci Hoyt, OMV deputy assistant secretary. The debt collection office has the authority to revoke licenses, seize bank accounts and take tax refunds.
Edmonson said OMV previously had been sending out about 40,000 notices of lapsed insurance a month, but people often ignored them without the threat the state’s collection agency offers.