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Text messaging can be an effective method to reach delinquent accountholders, especially when combined with other communication methods, concludes a report released last week from Mercator Advisory Group Inc., a Maynard, Mass.-based consultancy. "There is something about text messages that we still respond to," George Peabody, director of Mercator's emerging technologies advisory service, tells CardLine sister publication Collections & Credit Risk. "We ignore e-mail. We can use caller ID to screen our calls. But texts seem to be a pretty direct channel. Consumers haven't learned to tune them out." Text traffic in U.S. financial-services applications now exceeds 12 million messages per day and is more than doubling each year, according to the study. Text messaging for collection purposes has produced significant results, Peabody adds. Sending text messages to indebted consumers can save companies money by referring them to a less-expensive self-service payment system versus talking to an operator at a call center, he says. According to the report, Verizon Wireless was able to increase use of its self-service payments to nearly 18% from 5% over a seven-month period by "texting" delinquent accountholders. "The accelerating effect on consumers of text messaging when used in combination with automated voice messaging and interactive voice-response units, never mind traditional media, affirms this new channel's unique value," Peabody says.

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