Smarter Debt Collection Letters: Save Money, Stay Compliant

Mike McDonnell

Reflecting back on my last few blog posts, I noticed that a majority of the content dealt with new technologies that can be integrated into the mail process (secure eNotice, mobile tags, on-line payment portals, etc.). It got me thinking that, while exploring new technology options is important, we should not lose sight of the basic elements integrated into every agency’s mailing strategy to ensure you are getting the best ROI on your print and mail expense. The following items should be considered by all agencies to help contain costs, improve deliverability, and maintain compliance.

National Change of Address Service (NCOA)
According to the US Census Bureau’s data, approximately 1 in 6 Americans will move each year. Based on current population estimates, that equates to approximately 52.24 million people moving in the US each year! It is always a good idea to make sure that your print and mail process uses an NCOA service on your first mailing attempt. If a move update is on file with the USPS, by using NCOA you can be assured that your mail piece is going to the most current address for that individual. As you evaluate NCOA services, it is important to note that not all NCOA databases are created equal. Some services use only the “FastForward” 18 month database while others use the more comprehensive full 48 month NCOA database. 

Additionally, make sure that your service provider is identifying both move updates and “Moved, Left No Forwarding Address” (MLNF) instances when there is a known “move left no forwarding address” for a particular addressee. Lastly, your print and mail service provider should be able to incorporate business rules to either dynamically modify letters to comply with state level FDCPA requirements or block letters from being forwarded to states where you are not licensed to collect debt.

Address Standardization and Address Element Correction
In order to take advantage of discounted automated presort postage rates, the USPS requires that all addresses be formatted to CASS (Coding Accuracy Support Systems) standards. The address standardization process matches multiple elements of the address data to create a valid Intelligent Mail Barcode (IMB) and formats the address data to the preferred USPS formatting standards. Address Standardization improves both mail deliverability and allows the mail to be handled with the highest level of efficiency by the USPS.

When an address fails the standardization process it is normally an indicator that there is either an error with the address data or that it contains incomplete information. When this occurs it is a good practice to use the Address Element Correction Service (AEC). AEC can help make the required corrections to the address and it can also identify mail pieces that are undeliverable as addressed (UAA) prior to printing and mailing. We consistently see AEC providing a proven cost benefit to our customers by reducing return mail and the associated labor costs from handling undeliverable letters.

Bankruptcy & Deceased
For many of our customers we perform a search for both bankruptcy and deceased filings prior to printing and mailing the letter. This option is a great “insurance policy” against sending a letter on a debt that may have already been discharged in a bankruptcy. Additionally, if a deceased situation is identified, our agency customers like to know so they can alter their collection tactics accordingly.

You’ve got all this information…now what?
By integrating these data processing services into your print and mail strategies, you can drive significant savings on your print and mail cost – and garner some valuable information for your collection process. A key piece to these processes is making sure you have a vendor partner that can interface with your collection software, allowing the new information to automatically update your system at the account level. This will ensure smooth work flow and not consume valuable IT resources in your organization. Lastly, you will be assured that subsequent correspondences are being sent to the debtor’s most current address information.

Mike McDonnell, Vice President of Sales – Eastern Region for DANTOM Systems, Inc., has more than 15 years of business process outsourcing expertise, managing strategic relationships and applications in the Financial Services and Collections Industry.  McDonnell’s experience covers both third-party collection and first-party billing applications including traditional letters and statements as well as secure Internet-based presentment and payment applications. He has been an ACA Affiliate member since 1995 and currently serves on the ACA Board of Directors. McDonnell can be reached by email.

Known for its innovation and flawless execution, DANTOM Systems, Inc. is the leading receivables communication provider. DANTOM experts take the time to understand customers’ unique business requirements and tailor a solution to meet their receivables communication needs, including electronic bill presentment, payment portal, online archive, eNotice collection letters as well as dynamic full color digital ouput. The company partners with more than 900 organizations to create high-impact receivables documents while lowering costs – positively impacting their bottom line.