Any "new" technology is a bit scary especially to companies in a potentially litigious environment like recovery and collections.  According to the CTIA, Americans sent 1.5 Trillion text messages last year, up 50% in the second half of the year when compared to the first.  Simply put, text messaging is booming and shows no signs of slowing down.  

In 2010 the CDC released a National Health Interview Survey of 21,375 households with some surprising findings.  Consider these:

• 63 percent of adults living with an unrelated adult but without children had only cells, nearly four times the rate for related adults without children.
  
  
• More than 4 in 10 renters had only cells, about triple the rate for homeowners.
  
  
• 15 percent of adults in the Northeast had only cell phones, while the figure for those in other parts of the country ranged from 22 to 26 percent.  
  

In the interest of full disclosure, Intelligent Contacts offers both standard SMS/text messaging and Free to end user (FTEU) text messaging.  Part of our "Contact Maximization" process is identifying cell phones.  That's easy, the more difficult part is deciding what to do with those numbers once you know what they are.  I'll highlight here how we see clients use SMS/text messaging, both in and out of collections. 

The cell phone/text messaging issue is unavoidable.  Most of our 3rd party collection companies who utilize text treat it exactly like they do a cell phone call.  Some will call and text, some call but no text, and some do nothing with those numbers.  So far, all our clients who use SMS messaging currently do so during permitted FDCPA or TCPA call times.  No after-hours texting.  Maybe some sports celebrities could have benefited from that advice?

"Do I have permission to do this? Do I need permission? Where did the cell number come from?"  For third party collections, the issue of "express consent" comes up daily.   There have been several opinions/rulings that if a debtor provided a cell phone on an application or to the original creditor that it constitutes "express consent".  By freely giving out that number the debtor saying "here's my number, it's ok to call me on it".  If you are not currently segmenting client/originator provided numbers from skip service numbers, start today.

There is some question on whether that permission extends to 3rd parties or if a debt is sold does express consent transfer with chain of title.  Ask your friendly, neighborhood MAP attorney.  Nothing here should be considered legal advice.  Creditors and similar first party clients don't have these issues.  Creditors call and text without a second thought.  We want you in the same position and can make that happen - read on.

A close second to the consent question is cost.  Not the cost of the message, they're cheap, but the thorny issue of potentially creating a charge to the debtor.  While most cell phone plans include SMS, some do not.  Enter FTEU - Free to end user text messaging.  This allows anyone to send a message at no charge to the recipient, regardless of their plan.  For example, every month T-Mobile sends me a message that tells me my bill is ready for viewing.  That does not count against my message quota, and if SMS was not part of my plan I would not be charged.

Through agreements with the carriers we are able to do exactly the same thing.  Send messages to any cell phone user at zero cost to the recipient, and it doesn't even count against their message quota if they have SMS as part of their plan.  If there is no cost to the debtor, there is likely no issue with consent. (again, not legal advice)  Removing the cost issue makes it no different than a call to a landline.  Some of our first party clients (banks) use FTEU for every message as a courtesy to their customers. The best practice? When in doubt go free.  For initial contact(s) we always recommend using FTEU messaging.  But it doesn't end there.

Ultimately the goal is to have consumers opt-in.  Get their permission, their "express consent".  Would they give it?  Actually, yes they will and it is easier than you think. IC clients use keyword campaigns, letters, websites, e-mail, and often times agents successfully obtain consumers permission for SMS opt-in.  Consumers opt-in to receive payment reminders, receipts, notifications, confirmations of payment plans, and even links to pay directly from their smartphones.  This increases customer satisfaction, improves payment success, reduces plan defaults, and reduces costs, particularly mailing costs.

At the end of the day collecting a payment starts with communicating, opening a dialogue.  The first goal is to make contact.  When thinking about using SMS most people focus on initial contact when it is actually most valuable after that first contact.  An intelligent contact is communicating to someone in the way they prefer to communicate and that includes landlines, cell phones, e-mail, letters, online chat, websites, and yes, even SMS.  SMS is not "the answer", but it is here to stay.  The most successful companies will learn how to utilize SMS and leverage the benefits as a part of their overall communication strategy.

To recap:

1) Know where your numbers come from.  Keep creditor provided numbers separate from skip service numbers.

2) When in doubt, go FREE (FTEU - free to end user)

3) Get permission, consumers will opt-in.  It's easier than you think.

4) Communicate in the way that is comfortable and familiar to the other party

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Jeff Mains is President and CEO of Intelligent Contacts a leading communication software and technology provider to the credit and collection industry. Learn more at IntelligentContacts.com    1-800-214-7490