Our most effective collection efforts will be made on the telephone and occasionally calling on the customer in person. Other contacts will be made by letter, fax and e-mail, but we recognize that it doesn’t have the same quick two-way communication or the sense of urgency.

However, letters do have their place and can be effective if used at the right time to convey the right message. Most of us know this includes the early stages of collection activity, when we want to remind and perhaps prod a customer for a payment. Another effective stage for a letter can the the last or almost last contact with your delinquent customer. On these somber occasions, a collection letter may convey the message that they have just about exhausted any reservoir of good will and ‘further’ and more serious action is about to be taken. The letter medium helps to deliver the message that ‘this time’ you ‘really mean it’.

This technique is based on what my history books referred to as “The French/Indian War”[1] as depicted in a movie.

In August of 1757, the French army with Canadian militia and various Indian tribes surrounded and conducted a siege of Fort William Henry. The British negotiated a surrender, and before long they began a march towards Fort Edward.

In the movie it was shown that the Indian allies of the French were none too happy when the hostilities ceased.  Many of them were looking for a good fight and the plunder that had been promised to them from the French. They were determined to get it one way or another and began attacking the retreating British. The reports at the time indicated a very large number of people were massacred but historians figure the number was in the 150 range.

In the 1992 move, ‘Last of the Mohican’s’, the action was a bit more sinister than untrained allies getting getting out of hand, wanting others to have a bad hair day.  In the film, General Montcalm expresses displeasure to one of his supporters that he’ll just have to fight the same British troops again later. Serious eye contact is made and the rest is left to the viewer’s imagination.

How many times do you want to fight the same battle with the same opponent?

That happens to us a lot in collections and it’s not unexpected. A lot of the same folks will be past due again and again. Sometimes we figure that’s just the business – but there will be times when we figure enough is enough.

When I was the Mortgage Collection Manager for a large Trust company we decided the old letters just weren’t doing it for us. Historically, people might let other bills slip but they always paid their mortgage on time. If they couldn’t, they would call to explain and let you know how they would ‘make it right’.

After a period of high interest rates, a lot of people seemed to be taking their mortgage payment responsibility rather lightly and we took a stronger approach with some of them. The message we delivered included:

➢     Over the last two years, your mortgage has been in a past due situation on X occasions

➢     Please bring your mortgage up to date no later than 3:00 pm. On XX date.

➢     Once your mortgage is current, we encourage you to ensure future payments are made on time and honored by your financial institution.

➢     If this is not the case, we will not contact you further by letter or telephone but assign your account direct to our attorneys for appropriate action to commence”.

It is a strong message, but please keep in mind we were willing to work with our customers who may have found themselves in a difficult situation. This letter was directed to those individuals who we determined were playing a form of cash management – with our money. As a result, we did not have to fight the same battles time and again.

[1]    I’m sure the French history books and the Indian legends called it something else.