Debt Collection Letters That Really Work

Editor’s note: The following information is from an article titled “Nice People Can Collect Bad Debts” that was provided in a workbook at the 44th Annual South Carolina Pest Control Operators School. It was prepared by Palm Coast, Fla.-based I.C. Systems. Nothing in this material is deemed to give legal advice. All references to matters governed by law are intended to caution readers against potential liability. Such references along with illustrated forms, letters and scripts neither define legal limits, nor replace advice of qualified legal counsel in decision making.

It’s safe to say that debt collection is one of a PCO’s least favorite jobs. However, it is a necessary evil. PCOs can improve cash flow and collect debts without damaging customer relationships. When debts are seriously past due, it may be necessary to send out a debt collection letter. At times, collection letters are exactly the right medium to use. Keep in mind the following guidelines:

• Mail all collection letters ten days apart.
• Include the following: “Pay all now in this envelope because”
• Three letters are enough to signal state of communications

Here is an example of a series of debt collection letters

The following is a checklist for collection letters:

1. Is the letter brief? Y/N
2. Does a request for payment-in-full appear in the first paragraph of the letter? Y/N
3. Does the letter contain cute messages? Y/N
4. Is the general tone of the letter apologetic? Y/N
5. Does the letter use concrete, simple language? Y/N
6. Does the closing paragraph include a reason why the debtor is better off by sending payment in full today? Y/N
7. Does the letter include the exact amount (in dollars and cents) of the payment-in-full? Y/N
8. Does the overall tone of the letter seem threatening? Y/N
9. Is there a sentence in the letter which refers to the return envelope? Y/N
10. Imagine yourself as the debtor. Would this letter sell you on making the payment-in-full today? Y/N

Answer Key:

1. Yes
2. Yes
3. No
4. No
5. Yes
6. Yes
7. Yes
8. No
9. Yes
10. Yes

The author is Managing Editor for Pest Control Technology magazine and can be reached at bharbison@pctonline.com.