Use a framework
Many agencies have templates for standard letters. New or unusual situations may require individual letters. These are easier to write with a framework to follow.
•Address. The letter should begin with the address to which it will be sent, which must appear on your copy as well as the copy for the creditor.
•Client and references. Next comes the full name and address, including the postcode, of the client and all references or other identifying numbers. Major creditors may have borrowers of the same name, so detailed identification is essential to avoid confusion.
•Standard opening phrase. This can usefully explain the agency’s status. For example: ‘The above has contacted us for advice about their financial affairs and we are now helping them to look at these as a whole.’
•Outline the background. Next, tell the story so far (although not necessarily in the holding letter as you may not have all the details at this stage). It is essential to give all the necessary background and details. Go through the story in chronological order. Keep sentences short and factual. Avoid long explanations. Do not include demands or excuses. The statement of facts must include those on which you are basing the strategy, in particular any unusual expenditure or special circumstances of the client or the members of their household. So, if you are asking for a temporary suspension of payments and interest charges, make sure you explain that there is currently no available income or capital and set out the client’s future prospects.
•Make the request. The next stage of the letter should be the request. This needs to be clearly and simply phrased. Do not be apologetic or circumspect – link the request to the facts outlined and make it appear to be an inevitable consequence of them. Where relevant, ask the creditor to (continue to) freeze interest and/or other charges to prevent the debt from increasing further. The letter should continue by stating when you propose the strategy should be reviewed. You can express this either as a fixed period or, with reference to other factors – eg, ‘We will be happy to review this when Mr Parkinson gets a job.’
•Add any special reasons. After outlining the request, add the special reasons why this should be accepted. These may be obvious from the facts you have listed, but it is worth repeating them. If arrangements have broken down in the past or you believe a creditor will be resistant to the suggestion, however, it is useful to list whatever special reasons you can.
•Provide details of any offer. If you are putting forward an offer of payment, this should be clearly described – eg, ‘The first payment of £… will be made on 27 August and following payments will be made on the 27th of each month.’ You should also specify the method of payment. Advise your client to begin making the payments in accordance with the offer without waiting for confirmation from the creditor, as some creditors are prepared to accept offers but do not notify their acceptance and then complain that the client has not kept to the payment arrangement.
•Suggest an expected response. Your letter could then suggest the kind of reply you expect – eg, ‘We would be grateful if you could confirm, in writing, that this will be acceptable.’
•Who the creditor should reply to. Consider whether or not creditors should reply to the agency or to clients directly. If there is a heavy debt advice workload, it may be advisable to ask creditors to reply directly to their customers. It may be worth explaining why this is necessary. You should also include your contact details and availability (or alternative contacts where appropriate), so that creditors can contact you if necessary. Some creditors and collectors contact the client directly even when asked to reply to the agency, usually in an attempt to persuade the client to increase their repayment offer. This is a breach of the FCA’s Consumer Credit Sourcebook.
•Ending. End the letter with conventional politeness, such as ‘We are very grateful for your help in this matter’, followed by ‘Yours sincerely/faithfully’.