Fleet managers are dealing with a never-ending stream of invoices, paperwork, and other documentation that needs to be handled. Unfortunately, there are times when details fall through the cracks, which can result in complications down the line when the problem has escalated.
One thing that you might be wondering is: what happens when fleets ignore toll notices? The reality is that a single missed toll can end up in a collections account and even cause registration holds and other headaches for your fleet. Understanding the consequences of ignoring toll notices will show you why it’s important to have an effective toll management system in place for your fleet.
Do Toll Collections Affect Credit Score?
If there is just one missed toll, then it usually won’t destroy your credit score completely. But it can drop your score by 50 to 100 points when the issue stays in collections.
What happens when tolls go to collections? In most cases, the toll authority doesn’t report to the credit bureaus directly. Instead, the debt is transferred, and then a third-party collection agency steps in and files the report.
Since personal credit and business or commercial credit files are separate, the process varies. Too often, fleets overlook business-credit exposure because the individuals involved don’t affect their own credit scores.
Don’t be fooled by the myth that tolls “aren’t consumer debt” and won’t impact credit. Once that debt moves to collections, it can have a negative impact on your business credit score.
The Escalation Timeline: From Missed Toll to Collections
Understanding this timeline helps you see why a proactive approach can help you avoid the bigger issues, such as toll notices that end up in collections. Here’s how it typically works:
- After the toll is missed, the first invoice or violation typically arrives 30 to 60 days later.
- Once the invoice arrives, it starts a penalty phase, which might even be formalized as a “Notice of Civil Penalty.”
- If the toll is still unpaid, then it is transferred to a third-party collection agency, usually between 60 and 180 days after the toll payment is missed. This timeline depends on the state and tolling authority.
- Once the account is in collections, it usually takes another 30 to 60 days before the credit bureau reporting happens.
Timing matters. If you are proactive about resolving the missed payment as soon as possible, then you can save a lot of money and headaches by avoiding collections and credit reporting.
The Financial Implications of Collections, Fees, and Penalties
What happens when fleets ignore toll notices? There’s no question that toll violations can cut into your bottom line, especially if you don’t have a system in place for resolving the violations as quickly as possible.
For example, the fee escalation can take a $5 toll and turn it into $25 to $50 because of the penalties and collection fees that add up, as well as a ding on your credit score. These costs compound when you have multiple vehicles in the fleet and ongoing violations that are coming through.
Other expenses start to add up as well:
- Registration holds can take a vehicle out of service, resulting in lost revenue that is much higher than the cost of the original toll.
- Liability questions start to pop up, causing additional costs and complications.
- The ripple effect of unpaid tolls and a lower credit score can roll into your insurance premiums.
- Overhead costs go up because your fleet management team is dealing with the violations.
- Fuel costs might increase when the vehicle needs to be rerouted because it is unable to drive through certain toll authorities.
Credit & Records: How Long These Consequences Will Affect Your Fleet
How long do toll collections affect a credit score? According to the FCRA, a collection can stay on the credit report for up to 7 years from the date of the first delinquency.
Just because you’ve paid the toll and penalties, it doesn’t automatically remove the violation from your credit history. If the toll invoice goes to collections, then it can affect your business for many years. Usually, the toll collection will show on all three major credit bureaus. Additionally, toll collections can pop up in other places, such as background checks.
FAQs
Can not paying tolls affect your credit?
Yes, if a toll is left unpaid, then the tolling authority will likely transfer it to a collections agency eventually. At this point, the collections agency will report the debt to credit bureaus, and your score will be affected.
How long do toll collections stay on your credit report?
Under the FCRA, collection accounts can stay on a credit report for up to 7 years. Just because you pay the debt doesn’t mean that the delinquency is removed from your credit report.
Can unpaid tolls put a hold on my fleet’s vehicle registration?
Yes, many states place registration holds on vehicles that have toll violations. If a registration is put on hold, then it will take the affected vehicle out of service.
A Fleet-Scale System to Prevent Toll Notice Escalation
As you can see, ignoring toll notices can have a domino effect and cause a lot more money in the long run. The key is to prevent escalation by taking care of the violations and notices as soon as possible. The simplest solution to solve this issue is to have a consolidated dashboard so that these notices don’t slip through the cracks and end up in collections.
At Innovative Toll Solutions, we offer one dashboard that your entire fleet can use, as well as one point of contact across every toll authority that you are dealing with. This simplified system helps you stay ahead of the payments and avoid issues in the future.
For more information about how we can help your fleet’s toll management, contact us today. We’re always here to assist.