Sending letters through a Debt Collection Agency is the cheapest and most effective way to recover money from debtors.. Without a doubt!
Note: They are only effective when the debt is less than 180 days old, even better if it is around 90 days old.
Let us understand, what makes them so effective:
1. They clearly communicate debtors that their account has been forwarded to a professional 3rd party for collections. Situation has become a lot more serious. This is an eye opener for the debtor, and he will be more inclined to pay off the debt than he has ever been.
2. Collection agencies can report accounts to Credit Bureaus, which creates host of other financial problems for the debtor. This alone is a big motivating factor to make payment.
3. Debtors rightfully understand that this is just the beginning of the collections process. They will be contacted again and again through letters and eventually by a debt collector or possibly a legal suit will also be filed on him eventually.
What makes the image of collection agencies so horrific?
Sometimes newbie debt collectors who are not fully unaware of FDCPA laws, sometimes engage in unethical and threatening ways of debt collection, which is unlawful actually. But this has overall created a really bad perception ( a monstrous image) of Collection Agencies among most people. In fact, this horrific perception complements the collection efforts of even those agencies which perform collection in an ethical, diplomatic and empathetic way.
4. Often debtors relocate to a new address and try to become untraceable, thinking this will avoid all the collection hassles. Since collection agencies perform “Change of address” scrub from various sources, they are generally able to send the collection letter to his new address. Debtors are usually surprised, but then they know there is no point of running away from their payment obligations.
5. Collection letters are extremely cost effective. Can you imaging sending 5 collection letters for less than $15. Wait, but it is not just the printing, mailing and infrastructure costs, Collection Agencies perform various scrubs on each and every account to get more information about the debtor (like change of address, Bankruptcy check etc.). Their letters are handcrafted and approved by expert attorneys. Each letter has different verbiage for maximum impact. The letters which arrives contains a host of genuine legal verbiage, but good enough to scare any normal person.
6. They can send letters in both English and Spanish. Both versions with equal impact.
7. Letters are really the best way to collect money without damaging relationship with customers.
8. Even if a minimal of 25% debtors clear their bills during the Collection Letters service, you have received returns which are probably over 10x than what you have invested with a collection agency.