I recently read an Article about things businesses can do to collect money. One of the things it suggested was sending a Registered Letter to the person/business who owes you money. I disagree.
As a Business Lawyer for 21 years, with a lot of experience in Collection Litigation, I frequently explain to clients that the only thing that Registered Mail does is increase the cost to our clients.
Unless you have a contract or Court Order that requires notice be given by Registered Mail, there is no legal obligation to do so.
In Canada, Registered Mail currently costs an additional $ 9.00 on top of the $ 1.00 stamp to mail a letter. For that additional $ 9.00 you have given the debtor the ability to refuse to receive your demand letter. If the debtor refuses to sign, the postal carrier will not deliver the letter. That doesn’t seem like an effective use of money to me.
Even if the debtor does sign, the Courts do not put any additional weight on a registered letter if you end up suing for the debt they have not paid. Frankly, if you’re at the point of sending registered letters, you’re likely dealing with a debtor who has no funds or is very used to ignoring demands.
So, what is the solution? Our firm prepares demand letters & follow up phone calls on a flat fee basis. While debtors are prepared to ignore registered mail, there is a significant success rate in collecting money when a letter sent on Law Firm letterhead arrives at their door.
Of course, if you’re using our firm’s 30-60-90- Sue (TM) program, you already know the above and your cash flow is running smoothly. Even if you’re not: please don’t waste money on Registered Mail, you have better things to spend money on.