Local councils and government bodies may not usually be associated with sending round “the heavies” to collect debts from hard-pressed families.
But they are often worse than consumer creditors, can be very aggressive and quick to use bailiffs, MPs say.
The Treasury Select Committee says debts and overpayments are often pursued “over-zealously and uncompromisingly” by councils.
It calls for public sector bodies to change the way they recoup debts.
The current approach risks driving vulnerable, struggling people into further difficulty, the committee says.
In its report “Household finances: income, savings and debt”, MPs single out public bodies for being behind the curve in their collection methods.
It quotes evidence from Citizens Advice head of policy, Matt Upton.
“This is a point people find slightly difficult to grasp,” he says.
“When people first hear that government collection and local authority collection is effectively worst in class, versus consumer creditors, it is quite difficult to accept emotionally.
“Government must be better than some of these rapacious firms that we hear about.
“If you talk to banks, it is because lots of organisations have realised that incredibly aggressive collection methods are not effective at getting money in the door, because people do not respond well to some of those tactics.”
The Financial Conduct Authority told the committee that about a fifth of debt clients were arriving with problems paying council tax and utility bills.
And Step Change, the debt charity, said it was now seeing average council tax debts of above £1,000 for about a third of its clients.
Mr Upton, acknowledging some bailiffs could be heavy-handed. told the BBC: “We’ve seen cases where people have been marched to ATMs to make payments.”
He added that people can get into a relatively small amount of debt which can quickly spiral once debt collectors take over and add on fees and charges.