Debt collection has a clear goal: communicate effectively, prompt action, and recover debts. But the game isn't played on a static field. As we move further into the digital age, the tools of the trade are changing. Phone calls and letters are making way for a more immediate and direct player: text messages. In this article, we'll provide 10 optimized Debt Collection text message samples you can use today to improve your collection rates.

The Shift to Digital Communication in Debt Collection

The debt collection industry, like many others, has been swept up in the wave of digital transformation. Traditional methods of communication, such as phone calls and letters, are being replaced by more efficient and cost-effective digital channels. One such channel that has proven to be particularly effective is text messaging.

Text messaging, or SMS, offers several advantages over traditional methods. It's quick, direct, and most importantly, what your audience is using to communicate. 

Benefits of text messages for debt collection

  • Reach: According to a report by the Pew Research Center, 97% of Americans own a cellphone of some kind, with 85% owning a smartphone. This widespread adoption of mobile technology opens up a new avenue for debt collectors to reach clients.
  • Efficiency and Speed: Text messages are quick to send and receive, allowing for real-time communication. This can be particularly beneficial when sending payment reminders or confirming payment receipts.
  • High Open Rates: As mentioned earlier, text messages have a higher open rate than emails and physical mail. This increases the likelihood of your message being seen and acted upon.
  • Non-Invasive: Unlike phone calls, which can be disruptive and intrusive, text messages allow the recipient to read and respond at their convenience, leading to a more relaxed relationship between the debtor and the collection agency.
  • Cost-Effective: Text messaging is a cost-effective method of communication, especially when dealing with many clients. It can significantly reduce the time and resources spent on phone calls and physical mail.

Text messages allow for instant communication and can be easily personalized to the debtor's situation. This makes them an invaluable tool in a debt collector's arsenal.

Best Practices for Implementing Debt Collection Text Messages

Team meeting to discuss best practices for implementing debt collection text messages

Alt text: "Team meeting to discuss best practices for implementing debt collection text messages"

Let's dive into some best practices that can make your debt collection text messages more impactful and successful.

1. Personalization

Personalization is a key aspect of effective debt-collection text messages. Using dynamic content, such as a name or debt-specific details, can make the message more relevant and engaging. It shows the debtor that the message is tailored for them, increasing their likelihood of responding positively.

2. Clarity

Clarity is crucial. Text messages should be clear and concise, conveying the necessary information without any ambiguity. It should clearly state a purpose and an action required from the debtor. A clear message reduces the chances of misunderstandings and increases the chances of a positive response.

3. Compliance

Compliance with legal and ethical guidelines is necessary when sending debt collection text messages. This includes adhering to regulations such as the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA). It's essential to respect the debtor's rights and maintain professionalism at all times. This not only ensures legal compliance but also helps maintain a positive relationship with the debtor.

4. Timing

The timing of the text message can significantly impact its effectiveness. It's important to send the message when the debtor is most likely to read and respond to it. This requires understanding the debtor's habits and preferences. For instance, at Arrears we have a feature called Smart Timing, which analyzes the response behavior of your debtors, adjusting the timing of collection messages for each individual. By tailoring the delivery time to when each debtor is most likely to respond or take action, Smart Timing significantly enhances the effectiveness of your collection efforts.

By following these best practices, you’ll be able to maximize the effectiveness of your text messages, improving your debt recovery rates and maintaining positive relationships with debtors.

Interested in learning more about what makes a good Debt Collection Strategy in the digital era? Check this out.

10 Optimized Debt Collection Text Message Samples you can use

Creating effective text messages for your collections campaign can be more challenging than you think. Many restrictions won’t let your creativity run free. 

First, automated SMSs have a limit of up to 320 characters (two messages), but you’ll want to get your message across using minimal characters (one message/160 characters) if you are looking to improve your conversion rate with the short-attention-span debtors have these days. 

Second, and already mentioned in the best practices above, you need to comply with Reg F and TCPA, which obligate you to announce yourself as a debt collector and offer the possibility to opt out of that communication channel at any given time on every single message you send.

Now, considering all of this, let’s get to the good part.

1. Initial Contact

Making the initial contact with a debtor is a crucial step. It sets the tone for all future communications and can significantly impact the debtor's willingness to cooperate.

Here's an example of an effective initial contact SMS:

"Hello [Debtor's Name], this is [Your Name] from [Collection Agency]. We need to discuss an outstanding balance on your account. Please contact us at your earliest convenience. Reply STOP to opt-out."

This initial contact message serves a dual purpose. First, it informs the debtor about the outstanding balance, which is the primary reason for the communication. Second, it invites the debtor to get in touch, opening a line of communication for further discussion. By being direct yet non-threatening, this message sets a positive tone for future interactions, increasing the likelihood of a successful debt collection process.

The inclusion of an opt-out option ensures compliance with TCPA regulations, respecting the debtor's rights and maintaining a professional approach. This is something you’ll see on every message on this list, so get used to it.

2. Payment Reminder

Regular payment reminders can help keep the debtor informed about their due payments and encourage them to clear their dues promptly.

Here's a sample payment reminder SMS:

"[Debtor's Name], your payment of [Amount] is due on [Due Date]. Please make sure to clear your dues. Reply STOP to opt-out."

This payment reminder message is straightforward and informative, clearly stating the amount due and the due date. It serves as a gentle nudge to the debtor, reminding them of their obligation without being overly aggressive.

3. Payment Due Date

Introduction: On the day of the payment due date, it's beneficial to send a message to remind the debtor of their obligation.

Here's an example of a due date reminder SMS:

"Hey [Debtor's Name], just a reminder that your payment of [Amount] is due today. Please make your payment promptly. Reply STOP to opt-out."

This due date reminder message is a timely prompt for the debtor to fulfill their obligation. It's direct and clear, stating the amount due and reminding the debtor that the payment is due today.

4. Payment Confirmation

Once a payment has been made, it's important to send a confirmation message to the debtor. This not only acknowledges their payment but also helps maintain a positive relationship. 

Here's a sample payment confirmation SMS:

"Thank you, [Debtor's Name], for your payment of [Amount]. Your prompt payment is appreciated. Reply STOP to opt-out."

This payment confirmation message acknowledges the debtor's payment and expresses appreciation for their promptness. It helps maintain a positive relationship with the debtor, which can be beneficial for future interactions.

5. Payment Plan Proposal

In some cases, debtors might be unable to pay the full amount at once. Proposing a payment plan can be a helpful solution.

Here's a sample payment plan proposal SMS:

"[Debtor's Name], we understand you might be facing financial difficulties. We propose a payment plan of [Amount] per month. Please contact us to discuss this. Reply STOP to opt-out."

This payment plan proposal message shows understanding and offers a solution to the debtor. It invites the debtor to discuss the proposal, opening a line of communication for negotiation.


If you are finding these email templates helpful, check out our article on Debt Collection email samples later.

6. Missed Payment

If a debtor misses a payment, it's important to send a message to remind them of their missed obligation.

Here's a sample missed payment reminder SMS:

"[Debtor's Name], we noticed you missed your recent payment of [Amount]. Please make your payment as soon as possible. Reply STOP to opt-out."

This missed payment reminder message is direct and clear, informing the debtor of their missed payment and urging them to make their payment as soon as possible.

7. Legal Action Warning

If a debtor consistently fails to make payments, it may be necessary to warn them of potential legal action.

Here's a sample legal action warning SMS:

"[Debtor's Name], your account is seriously overdue. Failure to pay may result in legal action. Please contact us to discuss your options. Reply STOP to opt-out."

This legal action warning message is serious and direct, informing the debtor of the potential consequences of continued non-payment. It invites the debtor to discuss their options, opening a line of communication for negotiation.

8. Debt Settlement Offer

In some cases, it may be beneficial to offer a debt settlement to the debtor.

Here's a sample debt settlement offer SMS:

"[Debtor's Name], we're offering a settlement on your debt of [Total Debt]. Pay [Settlement Amount] by [Due Date] to clear your account. Reply STOP to opt-out."

This debt settlement offer message is clear and direct, offering the debtor a chance to clear their debt at a reduced amount. It states the total debt, the settlement amount, and the due date, providing all the necessary information for the debtor to make a decision.

9. Account Closure

Once a debt has been fully paid, it's essential to send a message to inform the debtor of the account closure.

Here's a sample account closure SMS:

"Thank you, [Debtor's Name]. Your account has been paid in full and is now closed. We appreciate your cooperation. Reply STOP to opt-out."

This account closure message acknowledges the debtor's payment and informs them of the closure of their account. It expresses appreciation for their cooperation, ending the debt collection process on a positive note.

10. Debt Sold to Another Agency

It’s important to keep good customer service until the very end, so you should inform the debtor if its debt has been sold to another agency.

Here's a sample message for this situation:

"[Debtor's Name], your account has been transferred to [New Agency]. They will be in contact regarding your debt. Reply STOP to opt-out."

This message informs the debtor that their account has been transferred to another agency. It prepares them for future communications from the new agency, ensuring a smooth transition.

How to Step Up Your SMS Collections

Graph illustrating the increased effectiveness of SMS collections with AI and automation

While the templates provided above are a great starting point, they are, by nature, general-purpose. They can't account for the unique circumstances of every type of debt and debtor. A more personalized approach is needed to maximize the effectiveness of your debt collection efforts.

Enter Arrears.

Arrears is a platform designed to revolutionize the way you handle debt collection. We understand that every debtor is different and that a one-size-fits-all approach isn't always the best strategy.

One of the standout features of Arrears is its built-in templates. These templates are designed to cater to a wide range of situations, allowing you to tailor your approach to the specific circumstances of each debtor. But it doesn't stop there.

Arrears also features a template generator that uses advanced GPT technology (Open AI). This means that you can generate personalized text messages that are more likely to elicit a positive response. 

Ready to see what Arrears can do for you? Book a free demo today and discover the difference that personalized debt collection can make.