Note: Since these letters are so short, two of them (an urgent notice and an ultimatum) must be done to count for one Business Letter in the Packet.
Laws and Stuff: In collection messages, there are certain statutes that must be followed, according to The Fair Debt Collection Practices Act of 1978. Do not do any of the following things in your letters:
Imply falsely that a lawsuit has been filed to scare your audience
Contact the debtor's employer or relatives about the debt
Communicate to others persons that the involved party is in debt
Harrass the party in debt (this is tricky, "harrassment" can mean different things to different people)
Use abusive or obscene language
Use defamatory language (lovely handles such as "deadbeat" or "crook")
Cause mental distress intentionally
Communicate by postcard (breach of confidentiality)
Send anonymous COD communications
Misrepresent the legal status of debt
"Communicate in such a way as to make the receiver physically ill" (your guess is as good as mine)
Give false impressions, such as labeling the envelope "tax info"
Misrepresent the message as a government or court document
Ways to go about it:
Positive appeals: this approach stressed the benefits of paying said unpaid bill. It neutralizes the unpleasant feelings that an involved party may be feeling and hopefully makes them get over their fear/procrastination/what have you and make good on the bill.
Negative appeals: unfortunately, positives don't always work. Sometimes you have to stress the bad consequences of what is going on. Some of these may be: the customer's credit and buying history, overall credit rating, etc. This appeal is not usually used in the first couple of messages to the customer.
#1 Notification Letter: (not an option for the BLP)
When to Send: a few days after the due date
What it is: usually a computerized statement which clearly tells the reader the amount due, date due, and penalties for late payment. This letter indicates that the creditor believes everything will go according to plan.
Tone: Not too serious. The writer usually believes that the customer has every intention of paying for the bill.
Our records indicate that your September payment is more than a week overdue. If you
have already mailed your check for $263.78, we thank you. If not, please send it in
When to Send: After the point where it seems that the non-payment is more than an oversight.
What it is: A note that assumes that something has gone wrong and avoids the suggestion of customer dissatisfaction. Instead, it emphasizes the reader's responsibility to communicate with the creditor.
Tone: Personalized, non-accusatory, helpful and concerned.
According to our records, we have not received your September payment of $263.78.
Because this payment is four weeks overdue, we are quite concerned. You have an
excellent credit history with our company, so we must conclude that there is a problem.
Please contact us at (800) 555-3434 to discuss this payment, or send us your check
for $263.78 right away. We want to help you correct this situation as quickly as
End With: Writer's name and phone number to help motivate response.
#3 Urgent Notice:
When to Send: after the inquiry has not accomplished the desired response.
What it is: a note that conveys urgency of the situation. It conveys the desire to collect the payment immediately and shows that the creditor is willing to take additional steps, but avoids over threats. There is still an opportunity to settle the debt without losing face.
Tone: serious, but willing to "make things right", disappointment, surprise, etc.
Start With: a signature at the top from a high ranking person in the company or some other attention getting device.
In the Middle: remind the audience of the order. You may want to talk in a personal tone to get the reader to respond.
At the end: specify the action that the reader must take. Give an alternate plan if needed.
I was very surprised this morning when your file reached my desk with a big tag marked OVERDUE. Usually, I receive customer files only when a serious problem has cropped up.
Opening your file, I found the following facts: your order for seven cases of "Grandma's Special Brew" was shipped six months ago. However, we still haven't received your payment of $456.78. You're in business, too. You must realize that this debt needs to be paid immediately. If you had a customer this far behind in payment, you'd also be as concerned as we are.
Please see that a check for $456.78 is mailed to us at once. If you need to work out an alternative plan, call me now at (410) 203-7658.
When to Send: When all else has failed and you think there is no other way to get the reader's attention. However, your company must be prepared to follow through, should action not be taken and also you should be completely backed up by company policy, not operating on a vigilante status.
What it is: a consequence heavy letter that tells the reader exactly what to expect should the debt not be paid. There is no more interest in why the person is not paying, only interest in collecting the bill.
Tone: no longer do you need to write in a concerned, personal tone. Now you can take a harsher tone, but you still must avoid harassment. You are in the position of "justified authority" now.
Start With: specifics of the order: when it was placed, mailing date, payment due date, and current situation.
In the Middle: specifics of the collection process: when reminders were sent out, any action discussed in these reminders, stress the point that the customer did nothing with these notes.
At the End: consequences already taken and those that will be enacted should the payment not come. End with the good consequences that will happen if the customer will pay the bill.
On September 18, 2000, you placed a catalog order for seven cases of "Grandma's Special Brew," and you applied for a credit account with us. We approved your application, and on September 21 we mailed your order with an enclosed invoice for $456.78. According to our credit application, which you signed, payment is due within one calendar month after an order is placed. As of December 21, your payment is significantly overdue.
Grandma's Brews INC. sent you reminders on October 20 and again on November 20. In both these letters, we asked you to contact us to discuss your payment. We also asked you to make a partial payment as a show of your good faith. You did neither.
Grandma's Brews INC. has already canceled your credit privileges and will turn your account over to a collection agency if we do not receive your payment for $456.78 by January 20. To reinstate your account and to avoid the problems associated with a bad credit rating, mail your check immediately.
Go back to Assignment #5