Sending fixed fee collection letters through a Debt Collection Agency is the cheapest and most effective way to recover money from debtors.. Without a doubt!
Note: They have maximum impact when the debt is between 60 to 120 days past due. Submitting accounts which are more than 180 days past due have a low success rate with the collection letters service. For these older accounts the Collection Calls service is recommended.
Let us understand, what makes Collection Letters 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 likely to pay off the debt than ever before.
Many customers have multiple creditors, and they essentially stop picking up their phone all-together. The only way to contact them are the Collection Letters.
2. Collection agencies can report accounts to Credit Bureaus, which can create host of other financial problems for the debtor. This alone is a big motivating factor for them to make a 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. Even a legal suit may 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 make a mistake of engaging in unethical and threatening ways of debt collection, which is completely unlawful. But this has overall created a really bad perception ( a monstrous image) of Collection Agencies among most people. However this horrific perception of agencies sometimes complements the collection efforts of even those agencies which perform collection in an ethical, diplomatic and empathetic way. Creditors should always hire an experienced collection agency with competitive rates. Agencies offering super cheap fees are usually the ones who hire inexperienced collectors and may potentially land them-self and their clients in trouble.
4. Often debtors relocate to a new address and try to become untraceable, thinking this will protect them from all the debt recovery contacts. Since collection agencies perform “Change of address” scrub from various sources, they are generally able to send the collection letter to the debtor’s new address. Debtors are quite surprised when they receive demands on their new address and gradually start accepting that 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, Litigious debtor check etc.). Their collection 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, good enough to make any normal person very concerned, thereby elevating the intention to settle the debt.
6. They can send collection letters in both English and Spanish. Regardless of the language, both versions have high impact.
7. These diplomatically worded Collection Letters are best way to collect money without damaging relationship with customers.
8. Say, even if merely 25% debtors clear their bills during the Collection Letters service, you would have received returns which are probably over 10 times than what you had invested in buying collection letter accounts. If accounts are submitted without delay (say around 90 days), recovery rates can easily exceed over 50% with collection letters service.
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