Using Psychology in Debt Collection Letters

“It takes two to write a letter as much as it takes two to make a quarrel”. – Elizabeth Drew 

Continuation of “How to Write a Perfect Debt Collecting Letter or Email?” (Part 2)

Putting the writing style on the side, debt collecting letters and emails have to be written in accordance to the debt collecting guidelines prescribed by the government.   In Australia the debt collectors are limited in what they can do and say by the Fair Debt Collection Practices Act.  Make sure you know them and have a solid grasp of the basic guidelines.  Make sure you follow them in all your correspondence or conversations with your customers.

What kind of debt collecting email/letter you write also depends on what kind of debt you are collecting.  There are few different writing approaches you can take depending on what kind of customer you are dealing with.

  • Gentle approach (if the customer is still an existing customer and you are likely to continue to do business with them).
  • Direct approach (if the customer has left your business or is just about to leave)
  • Disputed approach (if the customer has a dispute over their his debt, your cost, products or services)
  • Hard approach (if the customer had been ignoring your previous debt collecting letters or debt collecting phone calls)
  • “Scare them” approach (if the customer has made many promises that the debt will be paid and the debt is still unpaid)
  • Debt Agency approach (if the debt had been referred for collection to the professional debt collecting agency)
  • Legal approach (if all other avenues have been exhausted this is the final one that could be used – when the debt is registered at the court for collection).

Usually the first letter to go out is the most friendly one, with the next one stepped up in firmness, and the ‘legal letter’ as the finishing one in the series of correspondence.

If, for some reason you are still not sure what would be the best, then use reverse psychology in choosing the most suitable Debt Collection Letter style for your customer.  Think of yourself as the customer and what kind of impact each of these styles would produce with you.  By using this reverse psychology approach you will pretty quickly identify the appropriate letter style.