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November 29, 2007

At least 2,500 in Cumberland get mistaken tax letters

CUMBERLAND -- At least 2,500 taxpayers received letters from banks and mortgage firms incorrectly stating that their property taxes were past due.

Town Finance Director Thomas Bruce III said today that the mistake was caused by First American Corporation, which accessed town records earlier this month and incorrectly reported real estate tax account information to its banking and mortgage firm clients.

Those financial institutions, in turn, issued delinquent notices based on the incorrect information. The Santa Ana, Calif.-based firm issued an apology to residents this week. Meanwhile, the town is limiting the company’s access to its records, according to Bruce.

Many residents received the delinquent letters the Wednesday before Thanksgiving. Carrie Gaska, a spokeswoman for First American, said that the less than 325 delinquent payment notices were sent out by area financial institutions as a result of the flawed data; Bruce says the town estimates that between 2,500 and 5,000 residents were sent the notices.

The town was not aware of the problem until Monday, when some residents came to Town Hall demanding an explanation, said Bruce. Town officials met with the company’s regional representatives, who are based in Worcester, Mass., this morning.

“Taxes are a very emotional thing. We had some elderly residents come in who were very upset. This ruined their holiday weekend,” he said. “People work hard to pay their taxes on time, and I think Cumberland taxpayers in general respect due dates.”

First American Corporation is one of the largest business information firms in the nation with approximately 2,100 offices and $8.5 billion in revenue last year, according to its Web site.
The company has worked at least 15 years in town and in other communities in the state, according to Bruce, acting as a sort of “middleman,” transferring real estate data and tax revenue between area financial institutions who hire it and municipalities.

Most years, First American collects real estate tax payments from financial companies and delivers them to the town in one lump sum in May, said Bruce.

This year was the first year that the company also assisted area clients with gathering information for late payment notices. It began gathering information from the town via the town Web site sometime around Nov. 12, said Bruce.

But the software that the company designed was flawed, classifying residents who had not paid their taxes for the third and fourth quarters of the year (Nov. 30 and Feb. 28, respectively) as delinquent, according to Bruce.

Gaska confirmed that a code in the program used by the company’s tax service branch was omitted, causing the error. “The result was that some [taxpayers] appeared delinquent when in fact they had paid,” said Gaska.

The town was not informed that First American would be accessing the town information this month, said Bruce.

In the future, First American will need to get written approval from the town Finance Department before it can access town records on a quarterly basis for the purpose of issuing delinquent notices, according to Bruce.

The company will still be able to access town information and transfer tax revenue to the town from financial institutions once a year in May, he said.

“At the moment we do not trust the company’s controls and therefore the town reserves the right to take control of the release of the information that is needed for” banks to send out delinquent notices, he said.

Bruce stressed that the late payment notices were sent out by the banks and mortgage companies, and not the town. Gaska says that no other city or town in the state was affected by the flawed program.

Home owners who need further assistance can call the Town of Cumberland’s Office of Tax Collections at (401) 728-2400 or First American at (800) 452-3787.

-- Journal staff writer Philip Marcelo

Posted by Mike McKinney  at 6:20 PM | Permalink

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