SMS for Debt Collection.


In the last decade, thanks to technology, and smartphones, debt collection techniques, purchases, and consumer habits have changed dramatically.

More than a third of the USA workforce are Millennials, according to the Pew Research.

This generation has changed the rules of the game, as they were born used to technology, so now they are looking for apps and self-management, changing the collection methods as well.

But how do we contact customers when they don’t want to answer our calls?

Generation Y or Millennials spend an average of 5.7 hours a day on their smartphones, so getting in touch with them through either SMS or instant messaging notifications can be a good tactic.

Tips for SMS Debt Collection  

Payment Reminders.

Collection tasks are not reduced to the simple fact of requiring a person to pay a certain debt. With an automated system via SMS, a company will be able to approach consumers on specific dates prior to their payment deadlines, allowing them to organize their finances according to the agreed deadlines.

Cost-effective and quick to send.

Payment confirmation

A good relationship with the client must be taken care of during the whole process, always remember to send a payment confirmation as well as to thank the punctual payment to improve your relationship and boost loyalty.

Alternative payment options.

We know that we have all had problems at some point in time to make a payment to the court, so you can offer your customers options to make their payments and send them by these means. 

Costs reduction.

Previously, tasks related to the contact between the client and the company had to be carried out by people, which meant a significant expense for the company.

Today, thanks to technology, many of the tasks related to clients can be automated, significantly reducing costs for companies.

For instance, text messages represent an excellent alternative to carry out collection tasks since they do not depend on a human team to perform them.

Use a system that allows you to schedule the sending of messages.

Differentiating profiles

Not all delinquent customers are in the same boat: some are one or two months late with their payments, others carry considerable debt for much longer.

So, the way to approach each of them must be different.

When a collection company relies on an automated SMS system, it can generate different campaigns, thus sending personalized messages for each of them. In this way, in addition to automating the process, you can approach each debtor in a different way, making collection tasks more bearable and empathetic.

It is important to consider profile differentiation, as success in collection efforts often depends on the message and how it is delivered.

But how do you do it without breaking the Fair Debt Collection Practices Act (FDCPA)?

Although there is no rule against debt collection via SMS, there are some general rules that tell us what types of messages can be sent to our customers and when.

  • By law, you can only send text messages to your customers between 8 am and 9 pm during their local time.
  • It is forbidden to harass a client with repetitive messages, the number of messages allowed changes according to local laws.
  • You must always specify that you are a debt collector.
  • It is forbidden to threaten customers
  • You have to stop texting a client if they send you a written notification saying that they no longer want to be contacted by you.


Reminder Slingshot by Nuxiba

Our software allows you to perform different actions, from implementing different campaigns for your different clients, customizing messages, downloading reports per campaign, among others, ask for a free demo!

If you want more information and tips to improve your collection techniques, we invite you to download our article on 3 key factors in effective collection.

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