Collectors are starting to use electronic communications to locate debtors or past-due customers. Many people have public social networking profiles that a collector can use to find a mailing address, phone number, cell phone number, place of employment and other contact information by searching those sites.
It seems that text messages and e-mails are becoming the preferred and most effective way to increase collections. I know of at least one collection agency that has seen a 12 percent increase in collections by using electronic communication. E-mail and text messages seem to be a less invasive form of communication than a phone call, and your customers have the sense of being in control of when and if they respond.
Some collectors obtain customer consent for correspondence by text before the sale by simply adding a bit of wording to the credit application. The wording is similar to this:
"By signing this document, customer agrees to accept and understands that text messages may be used when servicing the account, including the collecting of debts."
Others have taken it a step further, adding a more detailed outline of how text messages will be used and having customers sign and acknowledge the following provision:
"You the customer authorize us (company name) to send you (customer) a text message at any mobile number at which we reasonably believe we can contact you, for any lawful purpose, including but not limited to:
- Suspected fraud or identity theft on your account
- Obtaining information necessary to service your account
- Collecting on your account
- Notifying you of important issues regarding your account."
If this is something you're considering, it's important to remember that all messages must include a mechanism for the consumer to opt out of receiving further text messages at any time. This protects the consumer as well as the collector, especially since the law does not specifically address text messages being sent as a form of dunning. If you decide to send billing alerts to customers by text message, it's imperative the customer not be charged for the text and that your company incur any charge associated with the text.
Here are some dos and don'ts for using electronic communication in your debt-collection efforts:
- Skip tracing or locating debtors
- Researching collection tools, such as software or skip tracing tools
- Credit reporting
- Use database technology to maintain account information on customers
- Get authorization for each payment
- Research place of employment
- Send instant messages to a debtor about a debt
- Initiate unauthorized additional payments on a bank account.
- Send a friend request to a debtor on any social networking website
Michelle Dunn is an award winning author and columnist and has been called the nation's authority on collecting money. She is the founder and CEO of Michelle Dunn's Credit & Collections Association, one of the top 5 women in collections, and one of the top 50 most influential collection professionals in the industry.