What is a due diligence letter and how is it different from the three collection attempts we are already required to make?

A due diligence letter is a notice sent to a debtor informing them of the creditor agency's intention to refer their debt to TOP for offset against federal payments. The letter contains specific language informing the debtor of their options and rights. Debts cannot be sent to TOP until 60 days after due diligence has been performed (which is the date of the letter, and also the date the letter was mailed).

Performing due diligence is a federal requirement for submitting a debt to TOP. In order to ensure this requirement is met, KTOP is currently offering to provide this service on behalf of creditor agencies at no cost to them. However, creditor agencies are encouraged to begin including due diligence language as part of their three initial collection attempts. This can usually be accomplished by modifying a collection letter that is currently in use by the creditor agency.

To view a sample due diligence letter, please click here.