For this project Ledger Leopard worked with the Innovationlab of the ministry of justice. The Innovationlab came up with a simple but effective solution: Let’s empower citizens to control access to their personal data. The Lab then challenged the technology Blockchain: could this technology help make the idea sustainable and 100% GDPR-proof? And could it also be the technology which makes it easy to connect data-sources of several organizations safe and quick?
The challenge originally resulted in the idea of a digital data safe – based on blockchain and Zero-Knowledge Proof – which gives the citizens the possibility to decide for themselves which organization can see which part of their personal data. In cooperation with the Ministry of Justice (Innovation-team J&V and DGSenB), the Cyber Security Group of the Delft University of Technology(TU Delft), and Blockchainprojects.nl we were able to further develop this idea, which was renamed the Financial Emergency Brake, to a sustainable new service for the Dutch Government: a cooperative framework for Citizens and Government organizations.
The CJIB enforces fines and other measures and ensures that any court-imposed penalties are collected swiftly and efficiently. If a citizen can’t pay the fine in full within the specified period, the CJIB offers a service where the citizen can pay by installments.
If a citizen doesn’t pay the fine at all or doesn’t pay the full amount, they’ll receive a maximum of two payment reminders. The sum payable increases with each reminder; the first reminder increases the debt to 1.5 times the original amount owing, and the second reminder increases the debt to three times the original amount owed. For example, if an initial EUR40 fine is not paid, the first reminder will increase the amount owed to EUR60. If this amount is still not paid and a second reminder is issued, the amount owing will now be EUR120.
If the citizen still doesn’t pay after the second reminder, the CJIB is legally authorized to collect any outstanding fines directly from the bank account of Dutch residents. If the account number isn’t available or there are insufficient funds in the account, the CJIB will instruct a bailiff to enforce collection of the debt (the citizen will also be liable for paying the costs of the bailiff).
If the bailiff is unable to recover the debt, the CJIB can apply three enforcement actions:
If this also fails and the citizen still doesn’t pay, the CJIB will continue to recover the debt in forthcoming years. Not that the initial amount of the fine will have risen considerably throughout this process.
“The process of recovering fines is successful if everyone who receives a fine also pays it. It’s the task of the CJIB to persuade citizens to pay any fines owing within the first eight weeks. However, for an increasing number of citizens, the enforcement measures don’t work – even if they wish to pay, they are unable to. This also applies to the additional pay-by-instalments service offered by the CJIB.”
To identify people who want to pay but can’t, and to provide them with services and extra time to fulfill their obligations, the CJIB needs to detect some signal that the citizen is struggling with their finances or is in debt. Currently, this signal must be provided by the citizen themselves declaring to the CJIB that they can’t pay.
The problem is, a large group of citizens feel ashamed at having to do this and are ashamed about disclosing their debt problems. Some have such high levels of debt, they feel paralyzed; they do not contact the CJIB or letters from the CJIB to them are left unopened.
This group of citizens is often experiencing either harsh social conditions, mental health issues, lack the skills (such as literacy, numeracy, and digital skills) needed to cope in society (or a combination of all of these).
The gravity of the debt problem often becomes apparent very late in the process, such as at the bailiff stage or even in the courtroom when a judge sees the details of the case. If the CJIB had all this information at the outset, a lot of time and money could have been saved and the debt wouldn’t have snowballed, becoming a burden on both the citizen and the CJIB.
With every increase in the amount of the debt owed (due to reminders and bailiff costs), the chance of the citizen actually paying the debt decreases. The CJIB ends up trying to recover what is an excessive amount. It’s not only costly for society, but it’s also an irrecoverable debt and a completely inefficient process. In addition, for some citizens enforcement measures can have a devastating impact on their lives.
Over the last ten years, an increasing number of citizens have been unable to pay fines due to debt and other problems, which has become a major issue for the CJIB. The current process hinders the CJIB from collecting fines in a socially responsible way:
By only using enforcement measures against people who refuse to pay, as opposed to people who can’t pay Preventing the creation of additional problems for people who can’t pay
Information about why citizens can’t pay fines is already mostly available within the government, for example in municipalities who provide debt assistance for citizens. If this information were available to the CJIB at the outset, the CJIB would know at the very start of the process that there was no possibility that the citizen could pay the total amount within the first eight weeks. Now here’s the problem – because of data protection legislation, government organizations aren’t permitted to share this kind of personal data.
A municipality knows that citizen X receives debt assistance from them. This is framed as a declaration – “citizen X receives debt assistance from the municipality”
The declaration is passed to citizen X
Citizen X decides (with the assistance of a social worker) whether the CJIB should be allowed to see this declaration
If so, the framework allows the CJIB to have access to the information “Citizen X receives debt advice from the municipality”.
The CJIB doesn’t need to access to any more detailed/less relevant financial information about citizen X – just the fact they’ve been receiving debt assistance. All the CJIB wants to know is whether citizen X can pay the fine. The fact that citizen X is receiving debt assistance is enough to indicate to the CJIB that it’s highly unlikely the citizen can pay the fine.
Armed with this simple piece of information (citizen X is receiving debt assistance), it’s likely that the CJIB will respond with additional services for the citizen (such as an overview of all the outstanding claims the citizen has at the CJIB, or even a customized payment proposal). This would reduce the turnaround times and the number of phone calls between debt assistance officers and the CJIB. This solution makes the citizen the director of their own data and makes it possible to build a co-operative framework in which the citizen and the government can work together to solve current problems and prevent further ones.
Confidentiality is paramount in enabling this idea to work. It must be water-tight, no additional data should get to the CJIB if the citizen doesn’t want it to. It also needs to be easy to connect to, and access, the digital data safe.
Stakeholder, like municipalities, shouldn’t need to undertake a massive IT project to implement a solution such as this. It must be technically easy to connect, without using a central data warehouse. This is where Blockchain comes in, and by combining it with the concept of Zero-Knowledge proofs, it transforms into a framework that can be of much more use than only the CJIB use-case.
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