Bay Area Collection Firm in the Running for IRS Work

Diversified Collection Services was born in a cramped, fourth-floor attic in Oakland 28 years ago. Today, the Livermore firm has grown into one of the most prominent and controversial debt collection companies in the country, with more than 750 employees in three states.

It has inked contracts with at least 15 states and several federal agencies, including the Department of Education and the Department of Treasury, to collect debts ranging from student loans to taxes that are owed to the government.

“They are recognized as a leading player in the field,” said Mike Ginsberg, president of Kaulkin Ginsberg, a collections industry research firm. “They are a top performer.”

Now, Diversified could be angling for one of its biggest deals yet, a contract with the Internal Revenue Service to collect money from delinquent federal taxpayers.

But the legislative victory has also raised the company’s profile, stoking fears that private bill collectors could harass taxpayers or mishandle confidential taxpayer information.

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