Getting Paid: How to Handle Accounts Receivable 4 1 | 2 | 3 | 4 | 5 |
Reprinted with permission from Janet Attard* Copyright 2004. All rights reserved.
Are there any regulations about what I can and can't do to collect bills?
The Fair Debt Collection Practices Act set down a number of guidelines governing the collection of consumer debt by third-party bill collectors. While the provisions of the act may not apply to you unless you retain a collection agency to collect outstanding consumer bills, you would still be wise to abide by the provisions of the act.
Among the actions you should avoid are:
- making threats
- using harassing or abusive language
- accusing the debtor of being a liar or deadbeat
- making the debtor's name known publicly (reporting late or defaulted payments to credit bureaus is not illegal, however)
- making false, misleading, or deceptive statements about what will happen if the debtor doesn't pay (such as saying you will sue if you have no intentions of doing so)
- implying that the originator (person who is requesting payment) of a collection letter is an attorney if he or she is not
- making a collection letter look like a telegram
- implying that the debtor has committed a crime
- making dunning calls more frequently than once a week
- making calls at very early or very late hours (after 8 P.M. is considered very late for dunning calls in some states)
- calling a consumer who is a debtor at work if his or her employer forbids it
What should I say in past due notices?
The first reminder should be very polite, suggesting the customer has merely forgotten or misplaced the bill. The tone should be friendly and indicate you assume the customer will pay it immediately now that he or he has been reminded. It might read something like this:
Dear Mr, Southard,
Bills sometimes get misplaced or overlooked, and we have not yet received your payment for our invoice #1234 dated April 25. Please check your records, and if payment has not gone out, mail a check today.
If a check was recently mailed, please disregard this notice. Thank you for your attention to this matter. We appreciate your business.
Sincerely,
If you don't get payment within two weeks of sending the first reminder, send a second notice. This second notice should be worded a little more strongly than the first. In addition, it should also ask the customer to call you if there is any problem related to the bill. This may flush out customers who aren't paying because they dispute a charge or aren't satisfied and those who might need to pay the bill in stages instead of all at once.
Dear Mr. Southard,
We have not yet received your payment of $230 for invoice #1234 that was mailed to you on April 25. Would you please take a minute to check your records now and forward payment so we may bring your account up to date? If there is some problem with your bill that you would like to discuss with us, please don’t hesitate to call.
Thank you for your immediate attention to this matter. Sincerely,
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