Text Messaging for Debt Collection

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Text Messaging for Debt Collection

Ensuring customers pay on time is easier said than done. Late payments currently cost small businesses more than $3 trillion per year. Beyond the staggering cost, no one likes the process of chasing debts––not your customers, and certainly not you. 

Can we let you in on a little secret? Debt collection doesn’t have to be this hard. 

SMS allows for fast, direct contact with your clients that ultimately gets you paid faster. Your phone call goes straight to voicemail, your automated email ends up in a junk folder, but your text message is read within three minutes

You might be thinking, what about the Fair Debt Collection Practices Act? Or won’t text messages annoy people?  These are valid questions, and we are here to answer them with the complete guide to using text messaging for debt collection.

Table of Contents

  1. Will Your Texts Annoy People?
  2. The Key Ways You Can Use SMS to Collect Debts
  3. The Benefits of Using Texts for Debt Collection
  4. SMS and the Fair Debt Collection Practices Act (FDCPA)
  5. SimpleTexting’s SMS Solution For Debt Collection
  6. How Do You Start Sending Text Messages to Collect Debts?
  7. Start a Free Trial Today

Will Your Texts Annoy People?

Debt collection is not just about dollars and cents. It’s about people. So, you don’t want to annoy anyone as you pursue payment. We get it.

The bottom line is that––like any channel––if you do text messaging wrong, you’ll annoy your customers and damage your brand. But do it right, and you’ll find much higher engagement rates and happy clients. (After all, you’re communicating with them on their preferred channel.)  

Texting isn’t something to fear in 2020. Contrary to what you might think, consumers are vocal about the fact that they want you to text them.


54% of consumers admit they become frustrated when they are unable to connect with a company via text.


86% of SMBs who use text messages to communicate with customers say it increases engagement.


The Key Ways You Can Use SMS to Collect Debts

We’ve established the fact that your clients want you to text them. Now let’s look at the different kinds of text messages that you can send.

The Outstanding Payment Reminder SMS

You know what they say, the best offense is a good defense. You can help your clients never miss a payment by sending them automated text reminders before their bill is due. These payment reminders are cost-effective and quick to send.

Today 2:00 PM
Hello John, a reminder that your account balance of $68.24 is due on the 23rd. You can submit your payment online, or we also take payments over the phone!

The Missed Payment Reminder

Sometimes your customers miss a payment. Maybe their credit card on their account was lost or stole, or they simply forgot. Whatever the reason, you can send them a gentle reminder that there is an outstanding amount they owe.

Today 2:00 PM
Hi Sarah, a friendly reminder that there is an amount of $150 outstanding on your account. It was due on Thursday, 6/7. Please call us to make a payment or pay online.

The Payment Confirmation SMS

If you appreciate good manners like us, you’ll know the importance of a well-timed thank you. You can also send payment confirmation text messages to your customers to improve your relationship and boost loyalty.

Today 2:00 PM
Laura, thanks so much for your payment on March 5th! We value you as a customer and look forward to future business with you.

Send Useful Information Related to Outstanding Debts

You can use text messages to convey information beyond the outstanding amount like payment plans, details of applicable late payment charges, and interest rates. This transparency and knowledge can make it easier to collect a payment, creating a win-win situation for you and your customers.

Today 2:00 PM
If you are having trouble making a payment this month, don’t worry. We offer several payment plans that we are confident will work for you: http://txt.st/ZGRXXD

Encourage Two-Way Communication

We recently wrote about using texting to help you exceed customer service expectations. Encouraging this two-way communication could allow your customers to get in touch about questions and provide another avenue to resolve outstanding disputes.

Today 5:00 PM
Hey, I’ve had a couple of unexpected expenses, and I’m going to struggle to make my payment 😳
Hi Steve, no need to worry! We have lots of different options. Is there a good time to call to discuss them?
In an hour?
Chat then!

The Benefits of Using Texts For Debt Collection

  • Save time when you send SMS. How long does it take you to make 20 phone calls? Now think about how many texts you can send in the same amount of time.
  • Get higher response rates. The average response time for a text message is 60X faster than email and is usually arrives within 90 seconds.
  • You know that your message is received. Emails get lost in crowded inboxes, and phone calls go straight to VM, but 95% of texts are read within 3 minutes of being sent.
  • Sending texts is less stressful. Text messages provide a less invasive means of communication than phone calls–meaning you won’t endanger relationships or cause undue stress.
  • Text messages are cost-effective. Our plans start as low as $25 for 500 text messages–that’s a lot cheaper than traditional debt collection methods.
  • Text messages create a sense of urgency. Creating urgency helps get you paid faster. After 6 months, a debt is only 50% recoverable. After 12 months, this drops to 10%.

SMS and the Fair Debt Collection Practices Act (FDCPA)

The FDCPA was passed in 1977 and provides rules around what third-party debt collectors can and cannot do when they’re collecting a debt from a consumer.

In 2020, the Consumer Financial Protection Bureau (CFPB) released some modern updates to the policy in order to better accommodate electronic messaging including SMS.

These new rules now give debt collectors explicit permission to use SMS—a contemporary update that outlines with greater clarity the general rules that dictate what kind of text messages you can send and when.

However, there are a couple of essential no-nos when sending debt collection texts.

  • You can only text your clients between 8 am and 9 pm in their local time. (With SimpleTexting, you can schedule SMS to arrive at the right time and avoid imposing on people’s privacy.)
  • You can’t harass someone with repeated text messages. The exact number of text messages varies, so it’s critical you consult your local laws.
  • You have to identify yourself as a debt collector and ensure you don’t reveal the client’s debts to a third party.
  • You can’t threaten clients.
  • Debt collectors who use electronic messaging need to provide a simple method for consumers to opt out. (With SimpleTexting, we provide a built-in compliance message instructing subscribers to reply with STOP to opt out).

While we cannot offer legal advice (nor should our resources be interpreted as or substituted for legal counsel), it’s important to remember that the above restrictions apply to all your communication channels. So, complying with them should not be particularly challenging.

Get Paid Faster With Our Powerful SMS Messaging Features

Here is a selection of some of our most useful features for collecting payments. You can see all of our features here.

Schedule Texts

You can schedule a text from your phone or even right from your computer. Schedule a send time that is FDCPA compliant

Automate Reminders

Send a series of texts over several days, weeks, or months. For example, you can send out a series of payment reminders.


Rewriting the same message over and over again can be tedious. With our templates feature, you don’t have to!

2-Way Messaging

2-way text messaging service makes it easy to strike up a conversation, enabling you to provide that all-important personalized experience.

Custom Fields

Manage your data and send personalized text campaigns. Our app includes a few default fields, but you can create as many as you need.


The key to sending smarter and more relevant marketing messages. For example, segment by whether someone has clicked a payment link.



How Do You Start Sending Text Messages to Collect Debts?

The odds are that sending even payment reminders by texts will free up hours for you that were otherwise consumed by phone calls, late payment notices, and legal disputes.

So, what does it take to get going? We’re pleased to tell you that getting started with SMS only takes a few steps:

1. Create a SimpleTexting Account

Start your 14-day free trial and get 50 outgoing text messages, unlimited incoming messages, full access to all our powerful features, and dedicated support 7 days per week.

2. Choose a Number to Text Enable

When it comes to text enabling your business, you have a few options. First, every SimpleTexting account comes with a text-enabled toll-free phone number. If your company already has an existing 10-digit landline and toll-free number, you can choose to text enable it.

The latter can make sense if you want to use a number that customers already know. In this case, calls go through as usual, and text messages go straight to the SimpleTexting platform.

You can also opt to get set up with a new local 10-digit number or a toll-free vanity number. Vanity toll-free numbers are custom number that spells out a phrase, for example, 1-800-MY-LOANS. With 800.com’s online shopping cart, it takes just minutes. Plus, as soon as you purchase your number, we can help you text-enable it.

3. Upload Existing Contacts

If you already have phone numbers for some of your customers in an existing database, you can upload them directly into SimpleTexting.

While you don’t technically need consent to email or text a consumer transactional messages––think payment confirmations, payment reminders, and missed payment notifications––we still strongly recommend that you obtain express written consent from your clients. Texting any numbers that you have not collected organically is illegal and strictly against SimpleTexting’s anti-spam policy.

There are many ways you can obtain express written consent:

  • Place a sign-up form on your website to let customers know about your text marketing program
  • You can ask your customers to text in a keyword to join your text notification program. A keyword is a short, memorable word or phrase unique to your company. For example, your customers could text “UPDATES” to your toll-free number. Your SimpleTexting account comes with the ability to create unlimited keywords.
  • When a new client provides their cellphone number, add a consent box for them to check to receive texts.

4. Integrate With Existing Tools

We allow you to connect SimpleTexting to 1,000+ apps instantly. You can automate your collections process, waving goodbye to repetitive workflows and increasing your productivity.

To achieve this, you can use our API or Zapier integration to connect with an existing accounting system or your CRM. With automated payment collection, you’ll wonder how you ever survived without SMS.

Try It for Free

Still not convinced that using SMS for debt collection is right for you? To help make the decision easier, we offer a free trial for businesses to experience our services in real-time.

We’ll provide you with a special keyword and 50 messages to send. No payment information is required, and switching your account from free to paid is easy.

We’re here to help you get started!

Send your first message in minutes. Try SimpleTexting free for 14 days. No credit card required.

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