For decades, phone calls and physical letters have been the primary methods the collections industry uses to contact debtors. While they retain their importance even now – in TransUnion’s 2024 industry survey, 86% of firms use telephone calls and 87% use letters – the use of email has risen sharply, with 74% of respondents now making use of this communications tool.
While other forms of communication, most notably SMS text messaging, are also on the rise, email is currently the most important digital communications medium for collections. This places a significant premium on mastering the collections email in order to leverage its potential effectively.
Here are our seven top tips and tricks for writing collections emails:
1. Be Clear About Your Email’s Purpose
Before you hit send on any email, it’s important to first define exactly the result it’s intended to accomplish. Emails can serve a number of purposes, but a single format or template will not adequately address them all. A few common purposes might include:
- Following up on a physical letter or phone call.
- Making initial contact with a debtor and establishing the best avenue for follow-up communication.
- Making a formal request for payment.
- Proposing a payment plan.
- Offering a proactive nudge before a payment is due to aid debtors in consistently meeting their obligations.
- Directing debtors to your site, app, or payment portal.
Explicitly defining the purpose of an email determines its tone and content, and will shape your thinking as you fine-tune its language and structure.
2. Writing a Compelling Subject Line
A debtor may or may not open a written letter and may or may not answer a phone call. There is little even the most skilled agent can do to alter that decision, but the situation is different with emails. The vast majority of emails arrive in inboxes with a subject line, informing the recipient of its purpose. The goal is for your recipient to open that email, and ideally to do so sooner rather than later.
This is, in part, why crafting a collections email isn’t a simple matter of copying your existing library of physical, written letters. They must be adapted to the email format, and creating a compelling subject line is a crucial step in that process. Here are a few tried-and-true tips for doing just that:
- Be clear that the email is about collecting a debt (because a misleading subject line undermines trust).
- Be specific about which debt is addressed in the email.
- Personalize the subject line, where it’s reasonable to do so.
- Use language that conveys a sense of urgency.
It is important to note that most consumers’ inboxes are flooded with scams and, unfortunately for collections agents, those scams often take the form of a collections email. Accordingly, email providers screen messages for words and phrases commonly associated with those scams, and either route them to consumers’ “spam” folders or block them altogether. Lists of those words and phrases can be found online, though they change frequently. Third-party email management services maintain and update such lists for their own internal use, and there’s a strong case to be made for leveraging their expertise.
3. Establishing Trust In the Body of the Email
Because fraudulent collections emails are so prevalent, it is important to establish credibility and trust in your own emails. There are a number of ways to approach this. Providing precise, personalized details is the most fundamental aspect of this: “You owe $1275 in overdue payments on your Mastercard” is vague, and could be a scammer; while “Your most recent minimum payments of $575 and $700 on your Mastercard ending in 1234, due on March 2nd and April 2nd, were not received” is specific, personal, and easily verifiable by the debtor.
Tone is also important. Scammers invariably resort to aggressive bluster in order to frighten recipients. Framing your email in polite and professional terms and positioning yourself as a supporting player helping debtors get (and stay) on track to meet their obligations paints a sharp contrast with the typical scam email. And, as we explore more deeply in this blog post, it can go a long way towards successfully collecting the debt.
4. Formatting Your Collections Email Properly
Reviewing sample collections email templates will quickly reveal a simple, functional structure that works well for most collections-related email communications. After the subject line, which we’ve already discussed, a typical structure might consist of:
- A personalized greeting.
- A detailed statement or reminder of the debt, expanding on the content of your subject line. In some cases, this may require elaboration — if your client is Hypothetical Capital Services, the debtor may need you to specify that this is specifically their car loan.
- A call to action explaining what action you wish them to take upon receipt of the email.
- At least a brief explanation of the benefits of compliance, and/or the negative consequences of escalation, should they fail to take the desired action.
You may also need to include (or avoid) specific language in order to ensure compliance within your operating jurisdiction(s) (which we’ll dive into in more detail below).
5. Writing an Effective CTA
A call to action is the most fundamental part of your email and demands the greatest care in its construction and wording. It is to collections what “the close” is to sales — everything else in your email is crafted to support the CTA.
Your call to action must be clear, explicit, and easy to follow. It is perfectly acceptable to offer multiple options, as long as they encourage the correct response and do not overwhelm the debtor with choices. For example, an initial demand letter might offer these alternatives: “If you are able to make repayment in full at this time, you can do so through our payment portal at [link to website] or through your banking app. If you are unable to make repayment in full, contact us at [phone number] or [link to website], and we’ll help you construct a payment plan that works for you.”
6. Getting Compliance Right
Securing repayment is the overriding goal of a collections email, but it is also necessary to ensure that your agency’s use of email remains in compliance with consumer protection and privacy laws. It is necessary, for example, to obtain the debtor’s consent to further communications through email (consent is assumed in the event of an existing business relationship, and explicit in some creditors’ terms of service, but this is not universal).
The updated Regulation F, which came into effect in 2022, brought some long-needed clarity to the use of digital communication methods. At the time of writing, the impact of the incoming administration’s policies on the CFPB and, therefore, Regulation F remains unclear. The overall trend is toward reduced regulation across the board by federal agencies, but it is likely that many states will respond by passing or extending new regulations of their own. Compliance, then, will be a moving target for the foreseeable future. Large and small agencies alike will need to tread carefully and lean heavily on their in-house compliance officers, external legal assistance, or third-party compliance software or service providers.
7. Tracking Your Results
A final tip, and a very important one, is simply to put a structure in place to monitor and analyze the results of your emails. Where possible, for example, it’s always helpful to enable “read receipts” to determine whether and when debtors have opened your email. This is especially useful when you’re evaluating the efficacy of your subject lines (which determine whether an email is clicked and opened) and your CTA (which determines whether the email results in payment).
Sending equal numbers of emails with alternative versions of the subject line or CTA, but with all other phrasing remaining identical, is an ideal way to assess their relative effectiveness (in marketing terms, this is called “A/B testing”). Comparing the success rate of the two alternatives will establish which is most effective, and that successful version will then form the basis for your standard email until you succeed in crafting an improved text that tests out at a higher success rate.
Monitoring the effectiveness of your emails should be an ongoing practice rather than a “one-and-done” checkbox on your to-do list. Over time, patterns will emerge demonstrating which language choices land most effectively with various debtor demographics and sub-categories. The more thoroughly you understand this, the more effective your emails will become.
A Successful Email Campaign Starts Here
The fundamental starting point for any successful use of email is access to debtors’ email addresses. First-party creditors often have this information through their app, from purchases online, or other interactions with the debtor. For third-party collections professionals, unless this information is furnished by the creditor, accessing emails can be more problematic. They are not included in the credit headers that underpin the databases of legacy data providers, for example.
Spokeo for Business provides a powerful tool to fill that gap. It’s billions of data points, drawn from a combination of regulated data, open source intelligence, and other public data, can quickly make connections between your debtor and their digital footprint. This includes any emails associated with the individual specifically or with devices that can be linked to them, such as mobile phones. It can also provide alternative phone numbers and even social media accounts, should your debtor ultimately express a preference for being contacted through SMS text messaging or social-media direct messaging rather than email.
To learn more about how Spokeo for Business can equip your agency for successful use of email, to see a demonstration of the product, or to arrange a no-cost trial, please reach out to our team using the contact information found on our Collections and Skip Tracing page.
Sources
TransUnion: 2024 Debt Collection Industry Report
Federal Trade Commission: Fake and Abusive Debt Collectors
Consumer Financial Protection Bureau: Debt Collection Practices (Regulation F)