TxDOT puts two million drivers into collections over unpaid tolls
TxTag Troubles: Nearly $1 billion added to TxTag accounts as billing woes continue
By Sarah Rafique, Brittany Glas, Josh Hinkle & Ben Friberg
AUSTIN (KXAN) -- Mela Louviere let out a laugh when she opened a collections letter for her TxTag toll account earlier in June. The bill showed she owed $5,750 in administrative fees for only $412.85 in toll usage.
“We assumed there had to be some sort of computing error, human error, something,” said Louviere, of Pflugerville. “There had to be something mistaken because we hadn’t done anything that was worth $6,000.”
It wasn’t an error. According to a Houston-based collections agency, her account was overdue and she was hit with a $25 penalty for each individual toll.
Louviere isn’t alone. This year, more than 2.2 million Texas toll accounts had a bill sent to the agency Perdue Brandon Fielder Collins & Mott, who added nearly $1 billion in fees to drivers’ accounts, according to information obtained by KXAN through an open records request. And, the number of Texans affected could be even higher since the Texas Department of Transportation, which oversees TxTag, said each account could have more than one vehicle tied to it.
“(The collection letters) are advising the customers that we have made every attempt to collect this toll on their behalf without the fees,” said Linda Sexton, deputy division director of toll operations at TxDOT. “Now it’s come time where we still have no resolution and the cost of us to continue to pursue these – we have to be able to recoup some of those costs.”
Issues with TxTag customer service and billing have been ongoing for years and even resulted in TxDOT fining contractor Xerox in February 2015 for not meeting the terms of their agreement.
“I would just tell them that it's getting better and as a result of this audit and the action plans and some of the actions we've taken it's going to get better,” former TxDOT executive director Lt. Gen. Joe Weber promised after an “unsatisfactory” audit rating.
Weber resigned in October 2015 and in January of this year Xerox handed over customer service and billing to a new company, Conduent.
But, despite those changes, drivers say they’re still facing the similar frustrations.
Louviere said the escalation of fees on her account could have been prevented if she received adequate customer service when she first tried to pay her $412 bill. In hindsight, Louviere admits she shouldn’t have moved the TxTag from her old vehicle to her new one. But when she realized her toll usage wasn’t being automatically debited from her account, she called customer service and an employee told her a manager would call to set up a payment plan at a later date.
She continued to call TxTag multiple times between April and June and spoke with representatives who told her to be patient. By the time a manager called her back, it was too late. Her account was in collections.
“They couldn't have been more unhelpful to us when trying to set up a payment arrangement. We're practically stalking them to give them the money we owe them,” Louviere said. “We want to pay them the money that we owe them, not the crazy, sky-high, ridiculous fees that they, for some reason, feel that we owe.”
Recognizing the burden excess fees have on thousands of Texans, Rep. Ina Minjarez, D-San Antonio, filed an amendment to cap administrative fines for nonpayment of tolls at $6 per transaction and $48 a year.
The amendment, which was adopted earlier this year as part of the TxDOT Sunset Bill, will go into effect by March 1, 2018. The measure, also referred to as Senate Bill 312, isn’t expected to affect existing accounts and it’s still unclear if the cap on administrative fines will also limit collections fees.
“The proposed rules don’t address this yet,” TxDOT spokesperson Veronica Beyer said earlier this month. “It’s important to keep in mind, we are still in the planning stages. Things could change.”
Minjarez said there’s still work to be done next session since she does not believe the amendment caps collections fees, which can amount to tens of thousands of dollars in fees.
“When you are unfairly hitting people with fees that they can’t pay at the end of the day, it creates a dislike for tolls and that's really what has caused so much dislike for toll authorities and toll roads,” Minjarez said. “I really felt that we really needed to take control, legally, and make sure that there was consumer protection.”
Customer service woes
A former TxTag customer service representative told KXAN she felt powerless while fielding calls from hundreds of frustrated drivers. In one case, she spoke with a man who said his 88-year-old father racked up hefty collections fees even though he doesn’t drive anymore.
On another call, the former employee, who requested anonymity for personal reasons, said a woman dealing with the death of her mother and hospitalization of her daughter received “threatening” calls from the collections agency over a delinquent bill that wasn’t her fault.
“When I looked into her account, again, it was sent to the wrong address. It should have never gone to collections, they should have caught it when she first called,” said the former employee, who quit her job shortly after reaching out to KXAN. “There was no reason to bill that woman and to have her call me and sob and cry and beg me to remove those charges. It's just, it's heartbreaking to listen to those kind of calls every day and it's all day long.”
Even though the former employee had the ability to see if an account was in collection, she claims she was instructed not to inform customers of that unless they already received a collections letter.
“So they're paying and they're thinking that they're paying their bill, which to me is even more deceitful,” the former employee said.
Sexton denied the former employee’s claims.
“To say that we wouldn’t tell someone that they’re in collections is absolutely an incorrect statement,” Sexton said.
However, KXAN corroborated the whistleblower’s claim with another customer service representative.
TxTag’s customer service call center received more than 1 million calls so far this year and currently averages about 131,000 calls a month, according to TxDOT. On average, TxTag representatives are on the phone with customers for about 7 minutes and 16 seconds, even though training materials instruct them to keep their calls under five and a half minutes.
Sexton said customer service representatives undergo two weeks of training, where they’re taught to maneuver the system effectively so they can help customers without leaving them on hold or transferring them between agents.
Still, the former employee said she is concerned about the relationship between TxTag’s customer service and the collections agency -- alleging both agencies stand to benefit from poor customer service as drivers rack up fees.
Sexton said that’s not true.
“We don’t want customers to be inundated with letters from a third-party agency and bills from us, so we try our best to consolidate what we can in an effort to address all of the customer’s needs,” Sexton said. “We don’t want there to be assumptions that if they paid all of their bills with us that they’re good with all the other agencies.”
In 2013, TxDOT executed a $97 million contract with Xerox State & Local Solutions to handle all TxTag operations. Xerox then subcontracted with Houston-based ChaseSource to handle customer service. Xerox also subcontracted with Perdue for collections.
Xerox told KXAN its spinoff company Conduent handles all aspect of the contract. As of January, Xerox no longer owns Conduent, who oversees the TxTag-related contracts. When reached for an interview, Conduent referred questions to TxDOT; ChaseSource declined to comment and Perdue did not respond.
“There's a whole series of contractors and subcontractors, and it's very confusing for drivers because they have a TxTag and they think that means one thing,” said Rep. Tony Dale, R-Cedar Park, who has two toll roads in his Central Texas district. “Depending on what road you drive on, it could mean something different in terms of who is doing the back office operations.”
‘Sky high’ fees
Matthew Kovac’s wife, Jessy, took care of her toll bills up until Jan. 8, 2017, when she died unexpectedly in her sleep.
Kovac said he paid some of the toll bills he got in the mail after his wife’s death. So, he was shocked when he opened a bill for nearly $30,000, sent on May 16 -- more than four months after Jessica’s death.
Even more upsetting, Kovac said, was the fact that 90 percent of the bill -- or $27,525 -- was for administrative fees.
“I immediately was like, okay, I'm going to contact TxTag,” Kovac recalled. “I've got a death certificate… I'm going to try and be reasonable with them.”
Matthew Kovac received this collection letter after his wife passed away.
But, after reaching out to TxTag and the collections agency, all they could offer him was a 70 percent discount. He was still on the hook for $9,000.
It wasn’t until he reached out to his state lawmaker that the collections fees were removed from his account.
“Why don't you turn around and look at your billing process and how your billing process is affecting thousands of thousands of people in Central Texas that are very upset with how this is running,” Kovac said.
KXAN has received dozens of toll-related complaints from drivers, many of whom say it isn’t their fault their bills were sent to collections. Some claim they received collections letters for vehicles they no longer own. In other instances, drivers never received a bill or their bill was sent to an old address.
Sexton said it is up to the driver to contact TxDOT and update their address after they move to avoid fees, which “can add up very quickly.”
There’s about 8 million active TxTag and Pay By Mail accounts, according to TxDOT. About 27 percent of those accounts had at least one bill in collections this year.
Before accounts are sent to collections, drivers are fined a $5 violation fee for each individual toll.
“These fees are certainly made clear up front to customers,” Sexton said. “Again, back to the statements, it’s very clearly drawn out how a transaction escalates through the process, and the applicable fees that will be applied if those notices go unanswered.”
But, drivers, several of whom dispute the fees, aren’t paying despite Perdue’s efforts to collect.
Less than two percent – or $16 million of the $999 million in collection fees issued so far this year -- have been paid as of September.
Under its initial contract in 2013, the collections agency kept 15 percent of the TxTag fees it collected. The remaining 85 percent of their collections went to the state. That changed in 2014, when Perdue was incentivized to collect even more fees. Now, Perdue can receive up to 22 percent of fees it collects based on how many transactions they resolve.
“Fees accrued to the point that it got out of control. You could have a 65 cent violation and they were hit with a $300 fee,” Minjarez said. “…At what point do you stop taking advantage of people just because you're looking at money and wanting to bring in that revenue? It’s just wrong.”
Searching for solutions
Dale said toll roads are supposed to be just that – a toll road, not a fee road.
The state representative said that’s why he backed Minjarez’s amendment earlier this year and why he is looking to take further measures in the next session.
“We shouldn't have a system that allows the fees to spiral out of control in the first place,” Dale said. “That's one of the things we're trying to get our arms around at the Legislature.”
When KXAN interviewed Dale on Aug. 24, he said he planned to ask Speaker of House Joe Straus to look into toll operations.
On Oct. 23, Straus added toll transparency to a list of issues he wants lawmakers to study before the next session.
The House Committee on Transportation will be tasked with studying “Texas' various toll authorities and evaluate their transparency and stakeholder responsiveness,” according to the Texas House of Representatives Interim Committee Charges.
The committee will also "make recommendations to improve the state oversight of toll authorities.”
In July, TxTag admitted some customers were billed and sent violations in error and, as a result, suspended pay-by-mail invoices and violations until the issue could be resolved.
But, the problems date back even further.
In February 2015, TxDOT fined Xerox $177,000 in damages for "its failure to meet contractual and performance obligations." Around that time, Dale asked the House General Investigating and Ethics Committee to look into TxDOT oversight of TxTag vendors, possible overbilling and erroneous fees.
In April 2015, TxDOT refunded $1.7 million to TxTag customers, and by August of that year, the state agency released an internal audit giving them an overall unsatisfactory assessment for performance and management of its $100 million contract with Xerox.
The problems stemmed from TxTag’s transition to a new billing system in June 2014 and Xerox’s poor handling of customer service.
Two years later, customers say the issue hasn’t been fixed.
“Their hiring practices, their billing practices, everything, it's just -- there is something wrong with that company,” said the former customer service employee. “And there's nobody watching them. Who is watching them? Isn't there a government agency that's supposed to be overlooking this kind of stuff?’”
Sexton said customers who don’t feel like their questions are being answered by customer service can submit an online inquiry about the issue they are experiencing.
“We take every opportunity to address those directly, one-on-one, with that customer, through either the incoming calls, through these service requests, or you know, what other means they feel necessary,” Sexton said.
Louviere said she’s still mulling over whether or not to hire an attorney to help her fight her $6,000 bill. In the meantime, she and her husband have found new routes to work.
“We're not driving on any tolls for the foreseeable future, for as long as we can help it,” Louviere said. “This was an absolute nightmare.”