Debt Collection Reminder Letter
There are a few different content options available when it comes to sending a debt collection reminder letter. The intent behind the letter should be non-threatening and it is simply a reminder that a debt is now due to be paid.
The Intent of a Debt Collection Reminder LetterThere are two objectives behind a debt collection reminder letter. The first is to simply bring the debt to the debtor’s attention with a non threatening reminder. The other objective is to find out if there is some reason behind the non payment of the debt. It can be the case that a reminder letter will be enough of a push to make the debtor either settle the bill or make contact with a reason for not paying.
The Tone of the Reminder LetterThe tone of the debt collection reminder letter should be as neutral as possible. There should be no threats of legal action or home visits. The tone of the letter is very important. It is very easy to worry a debtor into not communicating simply by including threats of legal action in the reminder letter. This is not the intention of the reminder letter. More forceful letters should only be sent at later stages of non-payment.
Debt Collection Reminder Letter ContentNot all debt collection reminder letters are the same and some companies will wish to include additional content. There are a few different options that can be taken such as reminding the debtor of the terms and conditions of the credit contract. A simpler initial reminder letter will simply state the names and addresses of creditor and debtor, customer and invoice numbers, and a reminder that the payment is outstanding. Another option is to request a date when the payment will be made by the debtor.
Incurred Interest and PenaltiesIf a debtor has left payment very late then creditors can legally apply penalties and amounts of interest. This can also be mentioned in the reminder letter as part of the credit contract terms and conditions. Often the interest and penalty inclusions are left until the point where a letter is needed with stronger demands for debt payment. A reminder that interest can be added over a period of time that the debt is left unpaid may also be an option.
Reasons Why the Debt Has Not Been PaidThere are usually a number of different reasons why a debt will either not be paid or be paid late. The debt collection reminder letter is a way to flush out any problems that the debtor is having with making a payment. A simple line asking if there are any problems with payments that could be looked into can be added. It may be the case that the debtor has phoned the company to explain the problem and the invoice department has not been made aware of the contact. A gentle enquiry will not cause irritation with a debtor if this has been the case.
Telephone Calls to the DebtorMany debt collection companies will bombard debtors with phone calls if a debt is late. This is definitely not the way to proceed and the reminder letter should be the first part of the collection process. Telephone calls should only be made once the debtor has not replied to reminder or stronger demand letters. Constant telephone calls to the debtor can be viewed as harassment and debt collection companies can be reported for this type of action.
Sample Letter of Debt Collection Reminder Letter
Name of creditor
Name of debtor
Dear (debtor’s name)
Customer Account No:
Our Invoice No:
Our invoice no. 1343445 dated 15.10.2009 which refers to your monthly payment of (monetary amount) has not been paid. This invoice should have been paid on the 06.10.2009 and at the very latest by the 14.10.2009.
As yet we have not received this payment. If you have paid this invoice then please ignore this letter. If there is a problem with regards to this or future payments please telephone our customer services department as soon as possible to discuss the matter. Penalties and accrued interest for missed or late payments will be detailed on your next statement.Please contact me at your convenience by letter or telephone call if the matter needs further discussion.