Best Practices for Email Communication in Debt Collection
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Email Compliance Best Practices in 2020 [3:15]
FDCPA & CFPB
The FDCPA was created with the future in mind, which is why it specifically refers to communication about a debt with a consumer through any media. It uses intentionally broad language to address all mediums – past, present, and future. So because email is included under the phrase “any media,” the FDCPA applies similarly to digital and traditional communication methods. As a general rule of thumb regarding email, asking “How would I get consent to call?” should help guide your efforts.
As we move closer to the end of 2020, we should expect to see the CFPB’s debt collection rule sometime during the month of October. With that, we should expect to receive more guidance on using modern communication mediums, such as email and texting, to collect a debt.
It’s also important to note though that as with traditional communication methods, there’s still going to be litigation risks when it comes to email. Tim Collins argues that the risk of litigation could potentially be lower for email communication because it feels less intrusive. Additionally, if you’re communicating with consumers in the way that they’d prefer to be reached, that risk could drop even lower.
The key is to understand the consumer when it comes to lowering your litigation risks and collecting on a debt.
Lavallee v. Med-1 Solutions
In an attempt to collect on a medical debt, Med-1 solutions had sent an email to Lavallee that required the consumer to click a link and take multiple steps to download the validation notice. Summary judgement was affirmed in favor of Lavallee due to the fact that the actual emails did not convey information regarding a debt and did not contain the necessary disclosures.
From this case, we learned that the validation notice should be included in the body of the email and be easily accessible.
Greene v. TrueAccord
In this case, the plaintiff (Greene) claimed that the email she received from TrueAccord violated the FDCPA and E-SIGN act because she had not given consent to receive email. The court determined that consent is not needed when the validation notice is included in the body of the email. As a result the case was dismissed with prejudice.
This case further affirmed that the validation notice should be placed in the body of the email, and additionally highlighted the need to convey that the initial email relates to a debt.
Email Disclosures: Should They Be Included Every Time?
The initial email should always include disclosures such as the consumer’s validation rights and state disclosures. Tim Collins makes the point that with e-mail as opposed to letters, you’re not paying for the amount of paper you use. Because there’s no financial cost of including disclosures in every email, it isn’t a bad practice. Certain disclosures that you should always include, according to Tim Collins, are the following:
- Option to opt out of email
- Right to dispute
- Ability for the consumer to schedule a call, change an address, etc.
Having more self-serve options available for consumers will make your life a whole lot easier.
Best Practices For Writing Effective Subject Lines [12:05]
In the near future it is likely that certain pieces of information will have to be included in the email subject line. When that day comes, the key will be to experiment with where and how you include those required pieces of information in the subject line. Until then, feel free to start experimenting to see what works and what doesn’t.
Preventing Your Emails From Going to Spam [15:05]
When you see an incoming call from “Spam Likely,” be honest – how likely are you to answer that? Not very. The same idea applies to spam emails, with the exception that the consumer might never even see your email. Most people don’t check their spam folders very often (if ever.)
One way to help prevent your emails from going to spam is to avoid attaching files such as pdfs. According to Tim, these are considered high risk and will likely send your email straight to the spam folder.
Will Debt Collection Emails Replace Letters? [18:05]
Tim believes that there will always be a need for traditional methods of communication like phone calls and letters. “I don’t see mail [letters] going away, I see it being part of the process,” says Tim. Going forward, agencies will increasingly have multiple strategies and communication methods in place.
“I’m not gonna email everybody if I don’t have to email everybody. I’m not going to call everybody if I don’t have to call everybody. I’m gonna have to mail some people because that’s the only way they’re going to respond,” Tim explains.
The future of debt collection will rely heavily on optichannel and consumer preference.
How Collection Agencies Can Get Started With Email [22:50]
Step 1: Change Your Mindset
Incorporate email into your strategy with the goal of consumer engagement in mind, not cost savings. Understand that some consumers will reply to your emails. See this as an opportunity to engage and have a plan in place. Email is a communication tool, not a cost savings method.
Step 2: Buy or Build
Although you could build your own system, buying a system is more efficient. Building your own distracts you from the core of your business. Buying allows you to focus on your business while the experts handle the rest.
Step 3: Be Prepared for Setbacks
Understand that just because you start out with great metrics like high open and click through rates doesn’t mean it will be that way forever necessarily. There’s always that chance that your emails could be labeled as spam. If that happens, you’ll see a decline in the performance of your emails. Then you know it’s time to investigate and adjust your strategy.
“Email is very delicate,” Tim emphasizes. When you’re just starting out, it’s best to increase your email volume slowly. This is called “warming up the URL,” Tim says.