Collections Emails

Reach Federal Credit Union has had great success emailing members regarding loan collection issues. We think the reason these emails have been effective is largely that they are different from the collection letters members get in the mail.

If we were to email the member the collection letter we send in regular mail, or if we gave up mailing collections letters and sent them only through email, we might not find email so effective. A benefit of sending collection letters via regular mail in addition to emailing collections notices that are different from what comes in the mail is that we have an additional chance to establish contact with our member.

We have automated collection letters that our system sends to members via email in addition to the formal “final demand” letters that go out via regular and or certified mail when applicable. The collections emails we send to members address late payments, delinquent payments, and collateral protection insurance issues.

An example of a letter we are sending via email is:

Your auto loan is 144 days delinquent in the amount of $1,216.00.

To avoid accelerated collection action up to and including repossession, you must resolve this immediately.

In addition, we contacted you on June 13th, 2013, that we needed proof of insurance and, as of today, we have not received that information.

If we are not able to determine you have had insurance within the next 24 hours, we will add a premium to your loan in the amount of $1,047.00.

This will result in an increase to your loan payment.

Advantages to this approach include that:

• We can customize the letter to cover multiple issues (credit reporting, delinquency, accelerated collection activity, and CPI) all in one communication that looks like a regular, unformatted email.
• With everyone having access to email on their smartphones, this may pop up in real time wherever they are, and they are more likely to read the entire e-mail and respond in most cases very quickly. This has been our experience so far.
• Every subject of every email we send to a member from collections contains the subject “Confidential,” regardless of the content of the email, even though these emails never contain even truncated account numbers. This is meant to generate a response and it has been effective for us on many occasions.
• Our emails are meant to have a much more personal approach and to appeal to the members’ desire to achieve financial fitness (i.e. credit reporting issue and CPI issues).
• To respond, all the member has to do is type into their smartphone right there on the spot when they receive the message, as opposed to having to call in (which members do not like to do in most instances). Members can even scan such documents as proof of insurance with their smartphones. We receive many emails from members before and after work hours and many of them contain an auto signature that reads “sent from my iPhone” indicating they are responding “on the go.”
• This process is more personal, but still firm.

CUES member Christine Petro is president/CEO and Andy Shaw is financial assistance manager for $97 million Reach Federal Credit Union, Menlo Park, Calif.