Email has come a long way from the mass blast messaging—developing, customizing, and optimizing intelligent email strategies has shown success in both engagement and repayment rates in debt collection. But there’s more that goes into harnessing this channel than just hitting send and hoping for the best.

Here’s how creditors and collectors can strategically leverage email in debt collection communications to enhance engagement, maintain compliance, and drive repayments.

Why is Email Critical in Collection Communications?

In today’s increasingly digital world, most businesses are already using email for consumer communications, from marketing to policy updates, so extending that to engaging delinquent accounts is a natural next step. Email is a familiar tool for both senders and recipients, and businesses benefit from this in terms of engagement and repayments:

• 99% of email users check their email every day, some as much as 20 times a day (vs 94% ignoring unidentified calls)
• Contacting first through a consumer’s preferred channel can lead to a more than 10% increase in payments (and over half of consumers state email as their preferred channel)
• Digital-first consumers contacted digitally make 12% more payments than those contacted via traditional channels

Beyond engagement effectiveness, email is a cost-effective communication tool, especially compared to traditional methods like physical letters or phone calls. Printing, postage, and call center costs quickly add up, whereas email offers a scalable option for communicating with delinquent accounts.

Moreover, email provides a secure and traceable audit trail. Each email sent can be tracked, and responses are timestamped, offering businesses a transparent record of all communications for compliance and reporting purposes.

Core Components for a Successful Email Program

While adding email into the communication channel mix is critical, it is the set up, execution, and continued optimization of that email program that can actually make a difference when it comes to consumer engagement. There are many elements, but three core components of a successful email strategy are:

• Infrastructure: An email program is built on several components—Mail Servers, Mailbox Providers, Internet Service Providers (ISPs), Email service providers (ESPs), and more—and while infrastructure can be complex, the risks a business runs without a sound infrastructure are quite consequential, including having sent emails blocked, deferred or delayed delivery, or winding up lost in the recipient’s spam folder.
• Data: Understanding data collected from consumer interactions helps intelligently influence an email strategy in a debt collection program, especially when focusing on email engagement metrics (such as Opens, Clicks, Unsubscribes, and more)—but skipping over these analytics and just using mass blast techniques can result in consumer complaints, hard bounces, falling into spam traps, and ultimately lower repayment rates.
• Content: Solid infrastructure and reliable data are essential in any email program, but when it comes to debt collection, content can be the tipping point between a consumer committing to repayment or ignoring the outreach altogether (or even reporting your communications as spam or harassment)—from subject lines to your call-to-action (CTAs), sending the right message to consumers is crucial.

If your email efforts are missing any of the core components, it doesn’t matter if your collection strategy qualifies as omnichannel—your operations are going to be missing recovery opportunities.

But let’s take a look at the use cases and success stories that harness the power of email for better consumer experience and bottom line results.

Use Cases and TrueAccord Success Stories

Surveys show 59.5% of consumers prefer email as their first choice for communication, and even the courts have ruled that email is less intrusive than a phone call for debt collection. This case—Branham v. TrueAccord—is a win for consumers, creditors, collectors, and omnichannel as a communication method.

The court victory by TrueAccord Corp. (TrueAccord) in the Northern District of Illinois showcased the benefits of digital collection as the court found receiving an email about a debt is less intrusive to consumers than receiving a phone call.

Considering that, when given the opportunity, more than 29% of consumers resolve their accounts outside of typical business hours (before 8am and after 9pm) when it is presumed inconvenient to contact consumers under the federal Fair Debt Collection Practices Act (FDCPA), relying solely on reaching consumers during a call center’s business hours can result in almost a quarter of consumers not engaging or taking the next steps in their repayment process.

Using a sophisticated omnichannel strategy helps TrueAccord reach consumers at times that are right for the consumer and through the right communication channel, which ultimately creates a non-intrusive consumer experience.

Want to know more about how the omnichannel approach and how each channel influences the effectiveness of a business’s overall collection strategy? Download our new eBook, Omnichannel Communication in Debt Collection: An In-Depth Look at Advanced Engagement Strategy by Channel now»»

The terms “omnichannel” and “multi-channel” are frequently used to describe consumer outreach strategies, and while they may sound similar, the differences between these approaches are crucial, especially for effective debt collection.

Let’s break down the key differences between omnichannel and multi-channel communications, particularly in the context of debt collection, and why these distinctions matter more than ever.

Missed Opportunities of Multi-channel Communications

Multi-channel communication refers to the use of multiple, separate communication channels to reach a consumer—such as email, text messages, phone calls, letters, or even self-service portals—but each channel operates independently from the others, and there is little to no integration between them.

For example, a consumer may receive an email notification about their outstanding balance, followed by a text message a few days later. These two forms of communication are treated as isolated experiences, with no connection between them. The consumer’s journey is fragmented and valuable insights on the consumer’s behavior is lost for the business.

While the multi-channel goal is to maximize interaction across the various channel touchpoints, it doesn’t enable cohesive consumer insights to influence engagement strategies, leaving better engagement and repayment opportunities on the table.

The Power of Omnichannel Communications

Omnichannel communication, on the other hand, goes a step further by integrating all available channels to create a unified engagement strategy. Whether the debtor is engaging with a text message, phone call, email, or self-service portal, the consumer’s journey flows smoothly across these channels.

If a consumer receives an email notifying them of their debt and soliciting repayment but opts instead to speak with a representative over the phone, the omnichannel approach ensures that the agent is aware of the context of the earlier interactions. The overall experience aims to be personalized and unified for the consumer, while delivering the business a comprehensive view of the consumer’s behavior and need (which can help influence more streamlined outreach with similar consumers in the future).

And omnichannel isn’t just about analytics and insights—studies have shown:

• Initiating contact with delinquent consumers through their preferred channels can lead to a more than 10% increase in payments
• The omnichannel approach has been shown to increase payment arrangements by as much as 40%

Omnichannel is the Future of Debt Collection—And TrueAccord Leads the Way

What sets omnichannel apart is the technology that underpins it—and TrueAccord stands apart with our patented machine learning engine, HeartBeat. By leveraging sophisticated data and insights from over 35 million consumer engagements accumulated over TrueAccord’s 12 years of service, our omnichannel approach tracks and adapts to evolving consumer behavior in real-time. If a consumer opens an email but doesn’t respond, our system might trigger a follow-up text or phone call at the right moment—tailored to the individual’s preferences and previous interactions.

Our decision engine, HeartBeat, determines the right channel to send the right message at the right time for optimal engagement. We approach consumer communication from an overall reachability perspective to effectively engage more accounts and get more resolution versus simply determining if one channel is better than the other.

While multi-channel strategies can help organizations reach consumers across various touchpoints, the omnichannel approach delivers a truly unified, personalized, and seamless experience that prioritizes the consumer’s journey.

By integrating communication channels and using data to respond to consumer behavior in real-time, TrueAccord can not only increase the effectiveness of their outreach but ultimately lead to higher recovery rates.

Want to know more about how the omnichannel approach and how each channel influences the effectiveness of a business’s overall collection strategy? Download our new eBook, Omnichannel Communication in Debt Collection: An In-Depth Look at Advanced Engagement Strategy by Channel now»»

Sources:

• McKinsey
• FICO

TrueAccord is at the forefront of defending litigation related to digital communications in debt collection and its recent victory in the Southern District of Florida is a resounding victory for digital channels in our industry.

In Quinn-Davis v. TrueAccord, the court grappled with the concept of timing in order to figure out when an email is considered inconvenient under both the Federal Debt Collection Practices Act (FDCPA) and the Florida Debt Collection Practices Act (FCCPA). In this case, TrueAccord sent the email at 8:23pm, which is considered a convenient time by both statutes. The plaintiff’s email service provider delivered the email into plaintiff’s inbox at 10:14pm, and the consumer opened the email the following day at 11:44am. The court found no violation of the FDCPA or the FCCPA and granted summary judgment in TrueAccord’s favor.

The FDCPA and FCCPA Prohibitions on Inconvenient Time

To reach its decision, the Court evaluated the inconvenient time provisions of the two statutes. First, the Court analyzed the FDCPA’s provision, breaking it down into three principles:

1. The basic prohibition: A debt collector may not “communicate with a consumer” in connection with any debt collection at (i) any unusual time or place, or (ii) a time or place known or which should be known to be inconvenient to the consumer. 

2. The safe harbor: In the absence of the debt collector’s knowledge of circumstances to the contrary, a debt collector shall assume that communicating with a consumer between 8:00 a.m. and 9:00 p.m. (at the consumer’s location) is convenient (and therefore does not trigger liability). 

3. The prior consent exemption: If the “prior consent of the consumer” is given “directly to the debt collector,” then the debt collector can engage in the activity described in #1 above, regardless of the debt collector’s knowledge or assumptions of the consumer’s communication preferences. 

–See 15 U.S.C. § 1692c(a)(1).

The Court explained that the FCCPA uses similar language to the FDCPA, quoting the statute:

In collecting consumer debts no person shall: … Communicate with the debtor between the hours of 9 p.m. and 8 a.m. in the debtor’s time zone without the prior consent of the debtor.” Fla. Stat. Ann. § 559.72(17) (emphasis added).

The Court noted that, since this case turned on the interpretation of “communicate with,” it did not have to “parse” the “prior consent” exception language. Applying the facts to these two statutes, the court found no violation of law under either—the first published decision relating to email and inconvenient times.

The Court’s Decision: Email, By Its Silent Nature, Is Never Inconvenient Like Noisy Calls

The decision starts with an eye-catching quote:

“If a tree falls in the forest and no one else is around to hear it, does it make a sound?” This case poses a modern variation of that old chestnut, with a tip-of-the-cap to our elected representatives in Washington, D.C. and Tallahassee…

The court cites its authority under the recent U.S. Supreme Court decision Loper-Bright Enterprises v. Raimondo to reject the CFPB’s interpretation of when an email is considered inconvenient in Regulation F, discussed further below. In its own interpretation, the court found that the consumer opened and read the email at 11:44am, which is a presumably convenient time under both statutes.

The court explicitly stated that it did not take into consideration facts about whether the timing of the email was inconvenient because no evidence was presented on it. However, the court said:

So, what is a prohibited e-mail communication under the FDCPA? When precisely does liability attach? If a debt collector sends an e-mail after 9:00 p.m. and the consumer opens and reads it at 9:00 a.m. the following day, does that violate the FDCPA? What if the debt collector sends an e-mail before 9:00 p.m. but the consumer reads it at midnight? Liable? Clearly, the FDCPA’s safe harbor was aimed at protecting consumers from after-hours noisy telephone rings—not e-mails sitting in one’s e-mail box (silently) overnight. (Emphasis added.)

By this language, the Court suggests that even an email sent after 9:00pm may not be a violation of the inconvenient time prohibition. In this case, the plaintiff opened the email over 13 hours after it was delivered into their inbox, indicating the consumer waited to read it until it was convenient for them.

Ultimately, an email is convenient whenever the consumer opens it because that is when they chose to do so. TrueAccord knows this to be true based on our email communications with millions of consumers. Our own engagement data shows that 25% of consumers engage with emails after 9:00 pm and before 8:00 am. The timing between when an email is sent, delivered, and opened, similar to physical letters, may vary widely from consumer to consumer based on their own choices.

The Court Refused to Follow the CFPB’s Interpretation of the FDCPA

It is important to recognize that in reaching this decision, the Court declined to follow the CFPB’s guidance. In Regulation F, the CFPB spelled out its official interpretation that the time an email is sent, not delivered, is used to determine whether the communication was sent during an inconvenient time. See 12 C.F.R. Part 1006.6(b)(1)(i)(1).

Citing both the Supreme Court Loper decision (and the original, landmark Supreme Court decision in Marbury), the Court stated:

While the CFPB interpretation may have some appeal (on policy grounds), I am neither bound by it nor required to defer to it. See generally Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024) (overruling Chevron USA, Inc. v. Nat’l Res. Defense Council, 467 U.S. 837 (1984)). “It is emphatically the province and duty of the judicial department to say what the law is.” Loper, 144 S.Ct. at 2257 (citing Marbury v. Madison, 1 Cranch 137, 177, 2 L.Ed. 60 (1803)).

Based on the plain language of the FDCPA, the Court independently concluded that a debt collector must “actually transmit or transfer information to another person in order to communicate with a consumer.” Notably, in reaching this conclusion, the Court pointed out what all of us already know because we use email every day, stating:

You don’t need to be a Ph.D. in computer science to take judicial notice of the basic nature of e-mail communication. Hundreds of millions of Americans use e-mail all the time.

This decision does not require debt collectors who set up their email policies and practices based on the CFPB’s Regulation F guidance to change their practices. As the Court noted, sending proactive, debt collection emails during the presumptively convenient hours of 8:00am to 9:00pm may be “more protective of consumers in many cases.” Just like sending physical letters, the time when a consumer chooses to read the email is outside of a debt collector’s control and fully within the control of the consumer. If the consumer chooses to read it late at night or 2 days later at noon, that is the consumer’s choice and their preferred time to read that message. Therefore, it remains a best practice for compliance with the plain language of the FDCPA and similar state laws like the FCCPA, to send proactive, debt collection emails during presumptively convenient times.

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Note: This blog post is for informational purposes only and does not constitute legal advice. It does not create an attorney-client relationship. Readers should consult their own counsel for advice regarding their specific situation.