Collect payment for an outstanding debt: Collection Letter

Sending a collection letter is an effective way to inform a customer of a past-due amount. Of course, the goal of the letter is for you to eventually collect payment. Once you have gathered and verified all of the customer's account information, you will be able to create a comprehensive letter that reminds the customer of any late balances and, hopefully, allows you to receive payment – if they’re not acting in bad faith. 

In case they still don’t pay, it also serves as documentation that you have tried a more amicable approach and provided sufficient notice before moving on to a different collection activity.

When payments are late, yes, there may be a late charge added to the overdue balance. A late fee may be a single total or may be set up to accrue at a designated rate (for example, a daily rate). Late charges are typically determined and agreed upon in the original payment agreement.   

Collection Letters may include details such as the creditor's name and contact information, the amount owed, the original due date, any late fees or interest charges, instructions for making payment, and consequences of non-payment.

Debtors have rights under the Fair Debt Collection Practices Act (FDCPA), including the right to request validation of the debt, dispute inaccurate information, and request that the creditor cease communication. Familiarize yourself with your rights and seek legal advice if you believe your rights have been violated.