Receivable/Accounts - Information for Credit and Collection Issues

Friday, July 19, 2019

Using SMS and Email in Collections

I frequently get asked about using email or SMS in collections, and I’d like to touch on some frequently repeated topics – texting or emailing consumers or businesses for outstanding accounts sounds simple, but it’s actually complex to implement and manage, and stay within the rules, if there are rules … so let’s go over what I’ve learned over the past few years …

Why Should I Text or Email?

The majority of people under 40 no longer have a landline.  Also a study was made of smart phone users, and the least used app on a smart phone is the actual phone function.  People’s behavior has changed – we don’t hold mail in the same reverence as we used to, we are bombarded with predictive dialer calls from marketing companies or offers for ‘free’ cruises, when you call someone, you don’t have multiple phone bolted to the walls in rooms across the house ring, you have a device in your pocket vibrate … this dictates that collection agencies and credit departments need to evolve with the way people communicate now.

How Do You Send Texts and Emails?

That sounds like a ridiculous question, but it isn’t … you aren’t going to pull out your personal cell phone to text a consumer about a debt (or at least, you should really reconsider it if that’s what you are doing).  You need software that can send individual or bulk messages, or a web API, or a vendor that can provide batch texting or emailing, and a way to manage outbound and inbound flow.

I am fortunate that I built my own software, and I can tell you, six lines of code allows me to send SMS messages from my collection software platform, but not everyone is half-a-tech-geek, but you need to think this part through.  If you hire an outside vendor to send a bulk set of texts that say “This is a very important message to call XYZ Credit at 1-888-999-5555” that’s not as efficient as saying “Fred Jones, it’s important you text back or call Blair DeMarco-Wettlaufer at 226-946-1730 or email me at  Which message are you more likely to respond to?

Also, think about how you respond to texts – when the blinky red light on your cell phone goes off because you received a text, do you respond with your own text reply, or do you dial the person who texted you?  I know an agency that hired an outside company to send texts on their behalf with a request to call a phone number and no other communication options, and were shocked they only received a handful of calls – that’s not how people behave with their cell phones, you respond to texts with another text.

So when people do respond, how do the responses flow to your team, and who is seeing the responses?  Texting or emailing can be a fairly instantaneous process, with communication back and forth, as long as you have someone receiving the messages and able to send out a reply quickly.  If you sent a batch of electronic messages out, and people can’t respond and reach you easily, why are you doing it in the first place?  The way we do it is if a single staff member sends out a batch of texts on their files, the responses come to them in the form of email notices – then they can use our CMS system to log the response, and send a reply back via SMS.

Also watch the pace that you send messages.  If you use a predictive dialer, it takes 45 seconds to call a phone, have it ring, and then broadcast a message – sending an email or text is instantaneous.  I can tell you from personal experience, the first time I built our software to send a batch of texts, we sent out 1000 messages simultaneously, and had 150 people text, email and call back within 2 minutes … the second thing we built was an adjustable throttle allowing our staff to set the number of seconds between sms messages in a batch.

Especially with emails, where privacy is less of a concern and you can get right to the details of the collection account, balances and so on, have a call to action -- don't just ask for a call or an email, give a link to your payment platform that allows the consumer or business to pay without having to jump through hoops.  We have a hydro portfolio that we use collection emails on, and I can tell you from experience when we email 400 initial collection notices with a hyperlinik to our payment website we often have 10-20 payments received before the email batch has even completed running.

Just like you would have a work strategy for how often to call someone, and how to deal with inbound calls, you should have a similar strategy for electronic communication with consumers and businesses.

What Are The Rules?

There are very few rules right now on text and email – British Columbia was the first province to reference email (allowing initial notices to be sent by email), and now Ontario has followed suit.  Other provinces still have aging laws on the books that refer to telegrams or collect calls, but are relatively silent on modern collection tools.

That does not mean that agencies should start texting consumers 20 times a day – it is likely that the various provincial collection agency regulators would interpret an email or a text to be a contact attempt, and several provinces have rules, such as Ontario, that limit attempts to three times in seven days.   When I first started texting individuals, I ran my workplan by a provincial regulator, and he said ‘that sounds reasonable, don’t be a jerk, and we won’t have to make a rule to stop you’.

When people move, they often take their email addresses and cell phone numbers with them -- beware the circumstance that you think a consumer is based in Ontario, but in fact now lives in Alberta and when you call them at 9AM Eastern Time, you are calling them at 7AM local time ... you can't predict or psychically know this, but understand this will happen and have a plan to flag files, prevent future calls outside of allowed collection times, etc.

In related regulation, the Canada Anti-Spam Legislation (CASL) does dictate how businesses can use commercial electronic messages (CEM) but states there is an exception to CASL for ‘enforcement of a right, or pursuit of enforcement of a right’ so for contacting debtors who owe money, consent is not required.  Here is a link to CASL:

But, like any other communication attempt regarding collections, privacy of information is key – most collection agency rules in the provinces revolve around contacting just the consumer, and taking precautions not to disclose debts to outside parties – so what if you email someone at a work email that’s shared with a team, or the person has left the company and their emails are forwarded to their former supervisor?  These are things that should be considered before you start blasting out thousands of emails or SMS messages a day.  The Office of Canada’s Privacy Commissioner says that every company must have a policy for determining an identity of a person when disclosing personal information – they don’t dictate what that policy is, just that a company have one.

What About Commercial Collections?

Well, it’s a little different here – and it can get murky.  Most businesses still have physical phone systems in their offices, so texting a business is less effective … but think about this, if you contact ABC Supplies Inc. about an outstanding debt, you can disclose the details of that debt to anyone in the company … but if you text an employee of ABC Supplies Inc on their personal cell phone, they may have a valid grievance with you.  Tread cautiously with SMS technology and commercial collections.

Email is a little easier here, as privacy of information is less of an issue internally, and anyone using an email domain is clearly representing the company, but try to email the correct people, confirm emails are getting through and are not blocked by their spam filters, and use professional language in an email, very much like you would with a fax or mailed letter.


Rules are coming to govern how to use SMS and email – some are of huge benefit, like the Ontario law change that allows emailed initial notices rather than mailed letters.  Other rules are going to be more restrictive, especially because sms and email technology is so accessible an inexpensive, some of the folks in our industry are bound to abuse the power to contact thousands of people instantaneously … the crucial thing to remember is human behavior.  Our goal is to communicate … remember that, and use tools that consumers and businesses are receptive to, and refine your work plan to make responding to communication and building resolutions with your delinquent accounts as painless as possible, both for them and your teams.

If you have any questions about texting or emailing in the world of collections, always willing to share what I know.

Thanks kindly,

Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Brantford, Ontario

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