Do text messages help solve the problem of late payment of fines?

Responsible researcher: Adriano Valladão Pires Ribeiro

Article title: COLLECTION OF DELINQUENT FINES: AN ADAPTIVE RANDOMIZED TRIAL TO ASSESS THE EFFECTIVENESS OF ALTERNATIVE TEXT MESSAGES

Article authors: Laura Haynes, Donald Green, Rory Gallagher, Peter John and David Torgerson

Location of intervention: United Kingdom

Sample size: 5450 individuals

Major theme: Economic Policy and Governance

Type of Intervention: Sending a message to a mobile device

Variable of main interest: Amount paid for outstanding fines

Evaluation method: Adaptive experimental evaluation (RCT)

Policy Problem

Receiving late fines arising from, for example, non-payment of taxes, traffic fines and criminal actions is a major challenge for the public sector. There is a non-negligible cost in the process of recovering such values. Therefore, in search of a strategy that increases the percentage of receipt of outstanding fines, an experiment was made in the United Kingdom to send a notification via cell phone to debtors.

Assessment Context

In the UK, each year, a million new fines are imposed, but only 50% are collected in the first 6 months. Recovering the amounts owed is costly in terms of administrative expense and time. A team is responsible for trying to contact debtors via telephone calls and, if this method fails, a bailiff is assigned to go to the debtor's residence, and may even seize properties in some cases. Cell phone messaging emerges as a more cost-effective alternative. Among their advantages are the fact that they can be sent by automated systems and their content can be easily changed at almost no cost, even allowing personalization per recipient.

Intervention Details

The experiment took place in three regions of southeast England between January and April 2012 and had two phases. The experiment population consisted of people for whom HMCTS (the acronym for the agency responsible for recovering outstanding fines) had a cell phone number and who failed to pay a charge at the level of authorizing the seizure of assets by court officials. At the beginning of each week, a list with the names of new debtors from the previous week was collected and only the cases in which the agency had the telephone number were kept, the other names were discarded. In the first phase, 1817 people were selected, in the second this number was 3633 debtors, totaling 5450 individuals.

With the list in hand, HMCTS sent an individual text message to participants' phones. The content of all messages reminded the debt, warned of the consequences of not paying it and instructed the person to call a helpline with a reference number. The types and messages sent are in Table 1. If the message did not reach the recipient, the sender was notified and these messages were classified as undelivered, 54.5% of the 5084 messages sent were in fact delivered. Finally, if the amount was not paid within 7 days of notification, a judicial officer was assigned to the case.

The motivation for this type of experiment is given by three factors. First, there is a clear sign that something was breached, that is, the outstanding amount was not paid by the agreed date and would therefore have a greater chance of punishment. Second, the text of the message required immediate action with a telephone to make a call and warned that a bailiff would be assigned if payment was not made. Third, in some cases the message was personalized with name and amount owed, signaling the government's ability to use information that could lead to a penalty.

Table 1: Message associated with each condition

Methodology

The experiment had two phases. In Phase 1, between January and early February, individuals were divided into 5 groups with equal probability, the control group, which would not receive any message, and the others with different treatments, in which the message sent could be the standard one. , personalized with the name, personalized with the amount due or personalized with name and amount due. This phase made it possible to verify, mainly, whether text messages, given any treatment, would be effective when compared to not sending a message. As individuals were allocated to each group randomly, the difference in the results of the experiment could be credited to the sending of notifications. Phase 2, between February and April, excluded the control group from the sample and aimed to achieve a better assessment of the effect of each type of message.

The treatment effect could be measured as a comparison of the difference in the average amount paid by people who received each type of message. There is, however, a complication in the experiment. Even if individuals were allocated to each group randomly, the message could end up not arriving and be classified as undelivered. Therefore, the observed effect of the treatment is not that captured by the averages directly. The average measures the effect among those who intend to treat, that is, among all those assigned to a treatment regardless of whether the message was delivered or not. Another effect is on those who underwent the treatment, that is, only among those to whom the message was delivered. This impact is obtained by dividing the average of each group of those intended to treat by the fraction of people identified in each group who actually received the messages.

Finally, it should be noted that the variable analyzed was the amount paid by each person, so the vast majority of individuals in each group paid nothing, while a small part paid from small amounts to higher amounts.

Results

Phase 1: The group made up of those who did not receive any message paid an average of £4.46 (value in pounds sterling). The group average with a nominal message was £12.87, a 189% increase over the control. Personalizing the amount due generated an average payment of £10.53. Lastly, the nominal value message had an average of £11.74. When counting only the people to whom the messages were delivered, the average amount paid for each group varies to £7.43, £15.14, £11.57 and £12.68, respectively for the standard and personalization groups. nominal, value personalization and nominal and value personalization. These results show that sending a text message has a positive effect on paying a late amount, all groups had a higher average compared to the average of those who did not receive a message.

Phase 2: Having established that sending a text with the charge is effective, it remains to explore the best type of message. For this, the group that would not receive a message was excluded and all individuals would be classified into one of the other 4 groups. The means for the standard, nominal, value and nominal and value groups were, in order, £8.34, £11.21, £8.82 and £9.68. When adjusting for the people who actually received the message, the averages rose, respectively, to £15.40, £20.58, £15.83 and £18.34. Again, the personalized message with just the name was the one with the highest average amount paid.

Politics Lessons

The experiment presented teaches that it is possible to improve the efficiency of government agencies using less costly means. Sending a text message to debtors with outstanding fines has proven effective in receiving the amount owed, especially when the text is personalized with the person's name. Following this procedure, the amount received from late fines would be almost triple when compared to not sending any text messages.

Reference

Haynes, Laura C; Green, Donald P.; Gallagher, Rory; John, Peter; Torgerson, David J.. "Collection of Delinquent Fines: An Adaptive Randomized Trial to Assess the Effectiveness of Alternative Text Messages", Journal of Policy Analysis and Management, vol. 32(4), pages 718-730, September. 2013.