Text Collecting

Text Collecting

 I asked myself “is Text Collecting legal?” three weeks ago.  I spent quite a bit of time answering that question for myself and my partners.  We spend around $0.22 a letter for postage, administration, envelope and paper. Our response is less than 1%. Don’t get me wrong, there are customers that still pay from letters and we won’t stop that initiative.  I just think it’s so primitive. If I’m going to submit an account to a credit bureau I have to preform due-diligence, but what if I can get them to call me back and pay for just a text message? What would the message cost? And am I breaking any laws? Finally and most importantly, how many callbacks will I get and how is that going to affect my overall operational cost and liquidly? I want to tell you what I figured out.

Is it Legal?

The quick answer is - Yes. I spoke with three collection attorneys and the ACA (American Collectors Association.) Here is how to make your message legal. #1 you must put the name of your company in the message. #2 you must identify yourself by name. #3 you must display a phone number, no random numbers. #4 you must display the Mini-Miranda in every correspondence. #5 you must provide customers a way to “Stop” future messages. #6 you must have prior consent from the customer to use text messaging.  


Here is the challenge

Being that compliant in a single message makes for a very long text. SMS messages, the less expensive route is about $0.01 per message but limits you to 150 characters. MMS, the media text message allows for much more data but twice the cost. Still cheaper than letters.

Let’s compare that to the $0.22 a letter or lost contacts by phone. It’s dang cheap. I can send a message out for one of my collectors with a 4,000 customer cue and he can just answer the phone all day. That’s $400 a month for each collector. Now let’s talk about the FTC lawsuits that happened back in 2013. The FTC re-wrote the protocol for using text messages because what happens if wifey picks-up the phone while hubby is cooking a steak. She sees a message from SCB and freaks out. This is a very important step. Once you have made contact with the customer, you must get consent to text and a number they accept to receive communication from a debt collector.


This is how many people called us back

Our message was simple. “Hi this is Dave from SCB, can you give me a call at 555.555.5555” + Miranda + “Stop” On average 7.1% of customers called our office on a dedicated line. We didn’t have to say the Miranda when the customer called because we had already displayed that in the text. Dave just got to answer “This is Dave.” This allowed a relationship to form between the customer and the collector. It was a relatively casual communication because expectation had been formed prior. 21% of customers messaged “stop” and they were automatically removed from the system.

How much did we make?

Approximately 1 out of 4 return calls resulted in a payment. When we compared the cost of the initial letter and the time it required to make the outgoing call. It was a no-brainer. Our Text Collecting results were astounding for follow-up. All our agencies can now run their entire portfolios and make very inexpensive contact with customers.

What’s our next step?

Once we communicate with the customers, with their consent we are scheduling reminders to automatically message them to pay their bill online with a link. This has not been tested but I should have numbers by March 14th, 2018.

Try this service in your agency

I’ve been working with a texting company for the last three weeks. I’m buying messages at volume discounts. The more agencies I partner with the cheaper the cost goes down for all of us. If you feel this service will work for your agency please email me and I’ll include your batch in my next purchase. And don’t worry, I’ll set you up on your own login. There will be no data sharing. The company I’m working with is also ISO compliant so there is no risk of data leaks.

My direct email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 619.455.1804 - LVM




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Vinton Moss

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