Texting for Debt Collections: The Ultimate Guide to Increase Accounts Receivable Payments by Text

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You’re working hard to bring in more collections payments, but clients aren’t answering your phone calls or responding to your emails. It’s costing you a lot of time, effort, and pain, and you need a way to connect with clients while staying 100% compliant.

What do you do?

Texting is your ticket to cutting through the noise and creating compliant engagement. We’re going to help you do it.

This guide gives you what you need to understand how text messaging can be used compliantly in the accounts receivable industry, and it provides actionable steps for substantially increasing debt collections. Ready to see how?

There’s a lot in this guide on compliance and setup. If you’re already familiar with that, you can click an item in the outline below to jump down to that section. Or just keep reading to take it all in.

Why is text messaging for collections so successful?

Success in any business comes down to giving your customers what they want, and what they want is to text. How do we know? They’ve told us.

  • 99% of texts are read (95% in just 3 minutes)
  • 89% would rather text a business than call or email
  • 91% would rather get a text from a business than a phone call
  • Text message response rates are 40-50%
  • Text click through rates are 40-50%
  • Texting in the sales cycle can improve conversions up to 600%
  • The lifetime opt out rate for texts is less than 5%

Check out these stats and more here.

Then compare them to the stats on phone calls and emails.

Which would you rather use? You’ve already got protocol in place for emails and calls, but we’ll help you create that for text messaging, too.

How do you stay compliant when texting for collections?

Collections is a heavily regulated industry, but texting is a grey area at the moment. Fair Debt Collection Practices Act (FDCPA) and Consumer Financial Protection Bureau (CFPB) regulations do not explicitly cover text messaging.

These regulations need updating, and likely will be soon. We’re not lawyers, and this is not legal advice, but there are steps you can take now that will also set you up for success later.

The spirit of the law is that people need to be able to get what they want, and walk away from what they don’t want, while avoiding harassment. So...

1. Clients have to opt in to receive texts from you.

They have to give you or your agency permission to text them. They can do this by:

1. Verbally requesting or agreeing to receive texts from you while talking over the phone or email.

2. Texting you first, and giving permission to text back.

3. Filling out a form on your website, by checking a box that includes “You can contact me by phone call, SMS, or email using the info I’ve given you.”

We’ll cover how you can respectfully encourage consent below.

The best opt in processes will ask clients to take a specific action to receive a specific kind of message from you—like requesting account updates through text and only receiving messages when their account has been updated.

You may need to earn consent for multiple types of texts, such as for account balances, for communications from a live rep, and for company updates or promotions. We’ll cover this more later.

2. Clients can opt out when they want.

A client can tell you at any point that they no longer want to receive texts from you. They can opt out by texting a keyword like “Stop” or “unsubscribe,” or by telling you through any channel something to the effect of “don’t text me.”

For reference, Text Request automatically opts out contacts you text STOP, STOPALL, UNSUBSCRIBE, CANCEL, END, or QUIT. We also have a “Text STOP to opt out” message sent to every contact the first time (and only the first time) you text them.

According to our internal research, less than 5% of opt in contacts ever opt out.

If someone tells you they want to text you or receive texts from you, you will likely do well with them, but it is your responsibility to make it easy for clients to opt out, and to honor those decisions. We’ll cover how to get opt ins in a moment.

3. Use “manual intervention” when you can.

Automated texts can get you labeled as an “auto-dialer,” which is bad for everyone’s reputation and wallets. These are typically contacts a company has added to a list, where messages have been previously uploaded and are scheduled to send later or automatically.

You need to avoid automated text campaigns that run without guidance or intervention.

Triggered texts, one-time automated messages that only send when opt in contacts perform a certain behavior, are okay because the contact has explicitly taken an action to get that SMS.

They are not added to any lists for future messages, and will not receive any other messages from you without performing an action to trigger that text. A good example is an account verification text. You get it one time for one purpose, and that’s it.

Then there are all the manual texts you might send, which involve an employee at your company physically typing a message (or choosing a template) and clicking Send. This is “manual intervention” -- a real person taking a manual step to send a text.

Whether you text one person or a million, manual intervention is a good step (and our recommendation) to compliantly text for collections and accounts receivable.

You can think of the differences between these types of texts like email:

There are verification emails when you sign up for something new. There are drip campaigns that automatically send you emails every so often. And there are individual or BCC emails you’ll receive from real people.

With texting, messages from real people are your best bet.

Should you text from short code or long code phone numbers?

Short Code

A short code is a five- or six-digit number used for automated one-to-one or mass messaging. They can send up to 1,000 messages per second, and are good if you want to reach thousands of people within seconds (like in emergency situations) or if you want to set and forget your communications.

The downside is that short code numbers are often expensive, and shared between multiple organizations. Sharing means you can’t use the same keywords as someone else sharing your number, because how would the technology know which organization to route the messages to?

A serious problem is that if someone opts out of messages from one organization using that number, they are also permanently opted out of communications from all organizations using that number. Short code numbers are also treated differently by carriers and their spam filters. That can be good or bad depending on the situation.

If you have the scale, resources, and use cases to own a short code number outright, they can be very useful and effective. If you do not, particularly if you’re a small-to-medium business (SMB), a long code number is probably a better fit.

Long Code

Long code numbers are 10-digit phone numbers, like your cell phone and business lines. They’re ideal for conversational texting, but can be used for triggered messages.

They’re also commonly used for group or mass messaging, but send at a lower rate than short code numbers. There are ways to send higher volumes of messages faster through long code numbers, but the standard rate is one message per second.

Long code numbers are not ideal for emergency or crisis communications, but are great for communicating back-and-forth with clients at scale.

People find long code numbers to be “less spammy” compared to short code numbers, and most businesses phone numbers (landline, VOIP, and toll-free) can actually be text-enabled, so that your agency and reps can text and call clients from the same numbers.

This is what we recommend in most cases, and the rest of this guide will focus on how to use long code numbers (though much of it will still apply to short codes).


8 Text Messaging Tactics to Increase Collections

1. Text-enable your business phone lines.

Before you can text, you need a phone number to text with. Personal cell phones are off the table, because there’s no oversight, they aren’t secure, and messages can be deleted. It’s a compliance nightmare.

You need messages to be permanently recorded, secure, and easy to review or search. You may even need to monitor or control what messages your team sends. So you either need to get a business number for texting, or text-enable your existing business lines.

Text-enabling your existing lines doesn’t affect your voice services, and it opens you up to a lot of other growth opportunities. One opportunity is you can text-enable the direct lines for each of your agents, and manage all of it under one account. This is great for segmenting and departmentalizing communications while maintaining oversight.

To start the process, or see if it’s even an option for you, check your business line here:

2. Create easy paths for text opt-ins (inbound texts).

You have to connect with clients to do your job, and they want to text. So let’s make your life easier by bringing inbound text conversations to you. There are a few ways to do this for both one-to-one messaging and for group or mass messaging.

Ask for a text in your voicemail.

You’re calling all day and people aren’t answering. You don’t get the callback volume you want, anyway, so just ask clients to text you back when you leave a voicemail.

“Hi [Mr. Johnson], this is [So-and-So] with [Company Name]. I’m calling to help you with your payments to [Company Owed]. Give me a call back, or just text me at this same number is that’s easier. [123-456-7890]. Thanks! Have a great day.”

Of the people who check their voicemail, many would rather text you back than call (or they may be too embarrassed to call). This brings text conversations to you, which makes your life easier.

Let them text you from your website.

Your clients have questions and they go to your website looking for answers, but they’d often prefer someone give them those answers than to dig through your website. This is a perfect opportunity to drive inbound texting—just use SMS Chat.

It’s like a live chat widget for your website, except messages come in as texts and your replies go straight to those contacts’ cell phones. This is great for you, because it drives text traffic and texting drives conversions.

It also means you don't have to keep a live agent available for the chat to be effective. SMS Chat can always send an auto-reply like:

“Thank you for texting [Our Company]! Our office hours are [M-F, 8-5]. Someone will personally respond to you ASAP.”

Related: Text Request SMS Chat User Guide

This gives you an open line of communication to follow up with clients later. Your clients are also going to appreciate SMS Chat, too, because they won’t have to wait on your site for a live person. They can text their question and move on with their busy day.

Build your lists with keywords.

Clients need to opt in to specific types of communications from you so you can stay compliant. Just like someone who calls you should not be added to a telemarketing list, someone who texts you a question should not be added to a marketing list.

But text subscribers are powerful for engagement. So what can you do to compliantly build your subscriber list?

Related: How to Build a Powerful SMS Subscriber List

Give them a reason and a prompt to opt in to those communications. Keywords are perfect for this.

A keyword is a word clients text to your number to opt in to communications specifically about that keyword. So you might prompt clients with:

“Text UPDATES to [123-456-7890] for updates on your account and from [Our Company].”

You can have different prompts for different communications, or use something like the example above for a more general list. You can have as many keywords on one phone number as you want, and each keyword creates its own unique list of subscribers.

Every time you create a keyword and someone opts in, they will be told how to opt out of (a) texts only related to that keyword, and (b) all texts from your number. This keeps you from having to worry about compliance.

3. Ask clients if they’d like you to text them.

You talk to clients over the phone and through email, and they need help with:

  • Setting up accounts
  • Understanding how things work
  • Making payments
  • And more

Whatever the situation, they need you to share some sort of information with them. And when they do, your response should be:

“Would you like me to text that to you?”

Some will say “no,” but many will say “yeah, that’d be great.” Then you can confirm their number and text them the link to your help doc, their account balance, a link to pay online, contact info for someone else they need to talk to, whatever it is.

Clients give you consent to text them in this situation. But if it’s through email, you automatically have a record of the exchange, and it probably lives in your customer relationship manager (CRM) or other client software.

Your phone calls should be recorded, but if they are not, you will need to either note in your client records that they gave you permission to text them, or have the client text you first, which gives you a record of consent.

Once you decide on the process that fits your business, asking clients if they want you to text them becomes natural and effective.

4. Create templates for compliance and convenience.

There are certain things people like you in your industry need to say, and certain things you need to avoid. Creating pre-approved text message templates for common situations ensures that you take advantage of what texting can do for you (save time and increase revenue) without worrying about any employees going rogue.

You’ll eventually want a text message template for any situation your team will encounter, but start with just the five most common.

What are the most frequently asked questions, or the most common communications you send? Create those templates, but keep length in mind.

Technically, one SMS text message can contain up to 160 characters. This doesn’t matter to clients, just to you for billing and usage purposes. What does matter to clients (and to you) is that messages are short and clear enough to hold their attention.

Related: How to Write Professional Text Messages Your Customers Want to Read

In Text Request, for example, you can create text templates for all reps to use. Create as many as you want, and reps will select the one they need when composing or replying to a message.

This keeps everything above board until you’re ready for reps to speak for themselves. Even then, templates will save you time and keep communications consistent.

5. Share payment reminders.

The #1 reason people miss a payment is they forget. The solution is to grab clients’ attention, and that’s what text messaging does best.

Assuming clients have opted in to receive texts from you, send them a text the day their bill is available to pay on your platform (e.g. their monthly statement). The message might read:

“[First Name], your new account statement is now available! View it and pay online at [ourwebsite.com/portal]”

According to our reports, about half the people who get that message will pay then. For those who don’t, send a payment reminder before the bill is due. That might be the day of, the day before, or two weeks ahead of time.

Typically the bigger the payment, the more room you want to give, but experiment and choose what works best for you. That reminder might read:

“Hi [First Name], here’s a friendly reminder that your payment of [$$] for [Service/Loan] is due on [Date]. You can pay online at [ourwebsite.com/portal] Thanks! - [Company Name]”

There are three basic ways to send these reminders.

1. Reps manually text each of their clients on specific days when you want to prompt payments. This is safest for compliance, but also the most time consuming (though our Peer to Peer Texting helps a lot).

2. Add your list of clients who need reminding to a group message (what we call a BCC mass message), and send one text that goes to everyone. Replies will always come back to you, not the group.

Our Text Merge also allows you to send one message that’s customized to each recipient based on the customer fields (merge tags) you use, such as name or account balance. If every recipient has opted in to messages, this is perfectly compliant.

3. Integrate texting with your other software so that these texts are sent automatically. Contacts must opt in to these automated texts. This is the most convenient option in most situations, because you don’t have to think about it once you’ve set it up, but it takes some upfront work.

Zapier can help you integrate texting quickly if needed.

Our recommendation for new texters is to stair-step your way through these three options. Start by having reps manually send reminders to each client, iron out the process and track what works, then move to option 2 and so on.

6. Deliver incredible customer service.

People want to turn to the experts when they have questions, and they want to text. By using tactics like SMS Chat and text-enabling your business phone lines (both covered above), clients can text you for the help they need.

Fun fact: Text messaging is the #1 most requested channel for business communications.

But you can also text clients to initiate conversations and see how you can help them. This is particularly valuable when you’re working with clients on payment plans and other situations that warrant longer-term relationships.

A simple “Hey [First Name], anything I can do to help?” goes a long way. The trick is to embed this as part of your client success or follow-up process.

Related: 15 Unique Conversation Starters to Drive Customer Communications

7. Manage team communications at scale.

Contacts need to give you permission to text them. Once they’ve given you permission, there are many ways to manage those communications and to manage your team.

Option 1 is to have all of your reps texting from the same dashboard.

This means each person would be texting from the same number on a shared dashboard. Compliance becomes easy, because all you need to do is login and view the one page where you can see everything everyone has said.

Each message gets a permanent stamp with:

  • The exact time it was sent
  • The date it was sent
  • The name of the contact who sent it

Contact tags and user signatures will also help you quickly see who’s doing what, and which clients belong to which reps.

Option 2 is to have separate dashboards for each rep or department.

This means different reps would text from different numbers. Maybe each rep would get their own number, or you’d divide them up by territories where a few people would each share a number. You can still manage all that under one account, and managers can still have access to those multiple dashboards.

Each dashboard (text number) comes with its own set of contacts, settings, message templates, and other features—so you can customize each to suit specific needs.

Then choose how you want to text.

If you need to text more than one person at a time, there are two popular options.

Peer to Peer Texting (P2P) lets you send individual messages as fast as you can click a button. Many collections agencies like this because there’s manual intervention for every message sent, but it can take some time to get through your list if you need to reach a lot of people.

The other option is a BCC Group Message, which is a message that you send once and goes to everyone in your group. No one can see who else is in the group, and any replies come directly back to you.

This is faster and easier in most cases, but many in accounts receivable want to send messages individually. In either case, you can use merge tags to customize every message that goes out, and see real time analytics on how your messages are performing.

Option 1, Option 2, P2P, and Group Messaging all work well for increasing collections while remaining compliant. Just pick what seems to be the best fit for you.

8. Earn more reviews and feedback.

No one improves without feedback, and few companies earn new business without online reviews. Texting can help you get both quickly, without doing anything fancy.

Simply text clients after you’ve worked with them to ask about their experience with you. Include either a link to a survey form, or a link to your reviews platform of choice.

70% of people will leave you a review if you just ask, so ask! A message like this will do fine.

“[First Name], I’ve enjoyed helping you through this process. Will you let us know how we did by [writing a quick review / completing a quick survey]? You can use this link [website.com/review] Thank you!”

How do you start texting for collections?

You need a professional platform to organize and manage all your texts, while ensuring security and compliance. We (Text Request) help companies with this every day. We give you free training and ongoing support, and we don’t charge for users or contacts.

If you want to see how we’ll help you do everything included in this guide, just grab a time for a quick demo. Or as a quick start, check to see if you can start texting with your current business number.