Private collection agencies being mulled for recouping EFKA dues

Private companies could undertake the collection of dues to the Single Social Security Entity

Private collection agencies being mulled for recouping EFKA dues

The Single Social Security Entity (EFKA) could collect an extra 4 billion euros from large debtors as well as from debts that increase disproportionately due to very high additional fees and surcharges, if the appropriate mechanism were in place.

Already, the Social Security Debt Collection Center (KEAO) collects around €1-1.5 billion annually through arrangements and compulsory collection measures despite it being short-staffed.

Although the main debts have been decreasing recently, the total dues are increasing, having now reached €47.88 billion, worrying the government. For this reason, various scenarios are being considered, such as the creation of a single blacklist for debts to the state and pension funds, as today, EFKA and KEAO operate in the dark: They do not know the financial behavior of debtors over time, nor do they have access to information about past due obligations and payment behavior with all public sector entities, in order to produce a credit rating for individuals and companies. They also cannot automatically share information and scores with other credit rating agencies.

Also on the table is the cooperation of EFKA and KEAO with private individuals, in order to have a targeted intervention in groups of debtors who would mainly be able to pay.

As EFKA executives explain, today there is no possibility of flexibility, for example, to pay off, at least initially, the main debts and, after this happens, to have a generous settlement of the additional fees, which indeed are very high.

Out of the total €47.88 billion in debt to KEAO, only €29.4 billion corresponds to the actual debt. The remaining €18.47 billion corresponds to increases due to additional fees. If the original debt is not paid or settled for a long time, the additional fees inflate and may even exceed the principal debt and keep rising since there is no cap.

KEAO and EFKA data show 6,051 debtors whose additional debt fees exceed the main debt, as non-arranged dues are charged with an annual interest rate of 8.5%, without any limit.

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