The "Write" Way to Collect

Letters can be an effective and efficient tool in the debt collection process. Letters enable you to pressure the debtor to pay and since they are in writing, add credibility to your collection efforts. Consider the use of collection letters when:
· The debtor has no phone, an unlisted number, or monitors calls with an answering machine
· The debtor is a single head of household or part of a two-income family and therefore not at home very often
· You have too many overdue accounts to possibly handle via the phone alone

Content Do’s and Don’ts
Do:
1. Keep the letter brief (no more than 100 words)
2. Request payment in full in the first paragraph and state the exact amount owed in dollars and cents
3. Use a “CC:” on your letter to convey importance (if you don’t have a department to send them to, CC: them to a file)
4. Use “we,” “us,” and “our” rather than “I,” “me,” and “my”
5. Write in clear, simple language
6. Include a sentence that refers to the return envelope
7. Close with a reason why the debtor is better off by sending payment in-full today
Don’t:
1. Suggest a payment plan or discuss a deal (it weakens your position…let the debtor begin the negotiations)
2. Apologize for bothering the debtor or for requesting payment
3. Include cute messages
4. Use a threatening tone

As a final test, imagine yourself as the debtor and then read the letter. Would you send payment in-full today? If not, rework the letter.

When to Send
Send three letters to the same person at the same address within 30 days. Have three different people sign the letters: the collector signs the first one, the office manager the second, and the owner the third. Involving more than one person adds credibility to the letters and shows the debtor the situation is becoming more serious. Include a self-addressed envelope and call attention to it in your letter. This is both a convenience and a show of urgency.

Addressing Unresponsive Debtors
If the letters fail to elicit a response, the debtor is clearly telling you that he/she does not want to talk with you. Debtors will continue to do what has worked. And, if not responding to your letters results in no further action on your part, then they will continue to ignore you. However, if ignoring you leads to contacts from your collection agency, then they’ll be more likely to take action the next time they become a debtor and receive a letter.

Copyright © 2005 I.C. System. All rights reserved.

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