Credit: August de Richelieu Via Pexel

One of the things that come to mind when people initially think about debt collection is the letters that people receive when a collections agency first makes contact. At Summit A*R, this process, like most aspects of collections services, is done with our Preserve Human Dignity (PHD) Philosophy in mind.

That said, here is an overview of what collection letters are, how they work, and why we do things differently at Summit A*R when it comes to the collection letter process.

What are Collection Letters?

Collection letters are legal documents clients receive that are designed to inform them about the standing and details regarding their overdue debt. These arrive in several stages according to a purposeful formal structure, which includes:

  1. Notice of Overdue Account and Amount Details
  2. Follow-up Reminders to Pay the Balance Owing
  3. Further Inquiry and Resolution Discussion
  4. Further Appeals and Statement of Urgency
  5. Demands and Warnings Regarding Further Action

One aspect of the collection letter process that should be emphasized here is the necessity to follow this structure through all communication. In this case, formality is both a sign of respect towards the client and a way to uphold the integrity of legal institutions that dictate fairness policies towards all parties involved. It also helps to convey and maintain the heightened sense of urgency as required in later stages of communication.

How We Do Things Differently

The most important aspect of the language contained in a collection letter from the standpoint of Summit A*R is our P.H.D. Philosophy, which stands for Preserving Human Dignity.

This means that every aspect of the collections letter must impart information with a focus on respecting the client rather than intimidating or insulting them. Along with a tone of urgency and seriousness, these letters must uphold a positive tone that conveys a sense of fairness to the client.

When Are Collection Letters Used?

Collection letters are used in both commercial debt collection and consumer debt collection as a method of opening a channel of communication with the party in question. These communications attempt two things:

  1. Convey Information
  2. Persuade

As per the formal stages outlined above, the main goal of initial collection letters is to inform the customer about the unpaid debt they owe and persuade them to make payment on that sum or settle it with one complete payment.

The content and purpose of the collection letter will change according to the 5-part structure outlined above. Later collection letters seek to persuade the debtor to reach out to the agency in order to initiate further discussion regarding the resolution of the unpaid invoice. These collection letters may also attempt to inform the party about the further steps to be taken should they fail to respond.

Knowing the Laws

It could be counter-productive or even illegal (depending on the nature of the content) to draft a collection letter without understanding the consumer collections laws and commercial collection agency laws that apply to this process. For example, according to the FDCPA (Fair Debt Collection Practices Act), collection agencies are not permitted to harass, lie to, or treat clients unfairly.

Since the Preserve Human Dignity (P.H.D.) Philosophy mandate is strictly followed in all cases at Summit A*R, our team should never need to worry about violating these protocols. It is no coincidence that the laws regarding the language and tactics employed in collections letters tend to conform with a mandate to treat people respectfully. It is also a happy by-product that ethical practices in debt collections result in better results, as confirmed by our history of successful debt resolution. 

Collection Letters in Specific Industries

Whether you’re delivering a dental collection letter or engaging in other kinds of consumer debt collections, it is crucial to understand the needs of the specific industry involved. For example, to tailor a collections letter to a specific case of dental industry collections services, it can be helpful to acknowledge the need to care for the health of one’s teeth despite the cost. Expressing empathy for the situation in this way can help communicate a sense of fairness and respect to the client; it can also benefit client relations between dentist and patient.

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It is likely evident at this juncture that drafting and delivering collection letters is not a simple process. While it should never pose a challenge for a third party to treat each person involved with dignity, the structure of clear and respectful communication is a vital tool that can help to prevent an unwanted tone from causing miscommunication.

Each stage of our process is designed with a history of experience in collections in mind and follows a precise formula to ensure the best relations. While this is just one aspect of the debt collections process, it provides an excellent example of why you should always get help with debt recovery experts rather than attempting to resolve the issue unassisted.

Knowing Your Options

When your company faces setbacks due to a lack of revenue, it becomes easier to get started on the path to resolving your collections when you understand the debt collection options available to you. When cash is running thin due to unpaid debts, working with a professional collections company with a good track record is the best way to quickly get money flowing back to your company.

Collection letters are a valuable tool for informing clients that they owe money and opening up an initial line of respectful communication to get the ball rolling. That said, they are not the only option when you need to work fast.

If you’re looking for help to resolve a debt of any kind the best solution is to get in touch with our team at Summit A*R so that we can begin discussing and developing a plan tailored to meet your specific needs. Call us today to find out more.