‘Better late than never’ principle works everywhere except for official relations. In many cases, a timely sent advance notice of adverse action will save you from serious penalties. The violations of the Fair Credit Reporting Act and other civil laws may result in a thousand or even a million penalty. No need to mention how such lawsuits and compensations undermine a business.
If you run an organization that is legally required to send advance notices of adverse action, it’s necessary to make sure you do this right. Use reliable advance action notice templates and clarify an advance notice period for your case. This will help you to build transparent relationships with your customers, applicants, or employers.
We have recently published an article about adverse action notice requirements and the FCRA. This time, you will learn more about:
- What is an advance notice of adverse action? Most common use cases, rules, and advance notice periods
- Advance notice of adverse action templates: useful references
- A step-by-step guide on sending personal advance notices of adverse action with Inkit’s direct mail automation
What Is an Advance Notice of Adverse Action? Most Common Use Cases, Rules, and Advance Notice Periods
Advance notice of adverse action is an official letter sent to inform someone about the future negative action. In other words, it justifies the future negative decision and gives the recipient time to challenge it or mitigate the consequences.
Although this type of letter is usually sent by banks or creditors that use the services of consumer reporting agencies to evaluate an applicant, an advance notice has many other purposes. In particular, it can be used to regulate employee resignation or inform someone about the termination of healthcare benefits.
Here are some most common cases when advance notice of adverse action is sent:
Credit refusal based on a consumer credit score/credit report
This can be a denial/revocation of credit, a refusal to provide the requested amount or terms of credit, or an adverse change in account terms. The adverse action against someone is justified by the information in their consumer report provided by a reporting agency. The average advance notice period is 7-10 days from the moment of the credit application with 60 days given to request a free copy of the report from a reporting agency.
Bank payment withdrawal
If your transactions are subject to the Direct Debit Guarantee (used mainly in the UK for internal payments), you may need to send advance notice of adverse action. Such a notice is provided before you withdraw a Direct Debit payment from someone’s account. Direct Debits are used in many European countries, including the UK, Germany, Italy, the Netherlands, Spain, Sweden, as well as in Brazil, Japan, Malaysia, and others. In the US, a similar system is called Automated Clearing House (ACH) transfers. That’s why, before initiating such transactions, make sure to clarify which form of advance notice of adverse action is required.
Employee resignation/application refusal
If you are an employee who plans to change the job, you have to inform your employers beforehand. In this case, your decision to resign is an adverse action taken against the company. The generally accepted advance notice period is a two week’s notice, yet the exact advance notice period may vary among different companies. Contrarily, if you are a company that will use an applicant’s credit score or credit report to evaluate them for a job opening, you are also required to send advance notice of adverse action. The pre-advance notice period is three business days upon your receipt of the consumer report. After that, you need to give consumers around 5 business days to review your notice and respond. In case the recipient doesn’t dispute the pre-adverse action, you can send an adverse action notice within five business days from the date of the pre-adverse notice.
Termination of healthcare/social benefits
When it comes to healthcare or social services, advance notice of adverse action must be sent before an entity reduces, suspends, or terminates consumer’s benefits. The advance notice period for this type of official notifications is 10 business days. For more details, check the page of the Washington State Department of Social and Health Services.
In addition to the listed cases, advance notice of adverse action is provided in many other situations. For instance, insurance or housing denial and reduction of SNAP services. Although sending personal electronic notices is allowed, print advance notices are still preferred by most entities and individuals. They provide physical proof that the message was received by the recipient and reduce the chance of any unexpected legal issues.
Advance Notice of Adverse Action: Templates and Useful References
After learning about the main use cases when advance notices are sent as well as advance notice periods, it’s time to pick a suitable template. There is no universal advance action template that can be mailed in every case. That’s why we have selected the most popular and common of them:
- Adverse credit action templates
- Notice of adverse employment action template
- Landlord adverse action template
- Mortgage adverse action template
- Healthcare adverse action template
Please note that the templates are shared for information purposes only. Make sure to adapt them to your needs and meet the applicable requirements for the advance notice period.
With a chosen template, regular mailing of adverse notices becomes much easier. Add direct mail automation to the mix, and you can fully delegate this process to a third-party tool to launch triggered direct mail delivery.
A Step-by-step Guide on Sending Personal Advance Notice of Adverse Action with Inkit’s Direct Mail Automation
Automation is a growing marketing trend with 67% market leaders currently using marketing automation platforms to improve response rates and other indicators. Although many companies focus on online marketing tools, modern automation solutions work for offline channels equally well.
With Inkit, direct mail automation goes beyond digital marketing channels while staying incredibly simple. It is essential for anyone who sends a lot of mail pieces on an ongoing basis, which is true for most types of advance notices. If this is your case and you wonder how to implement direct mail automation, here are the steps that we recommend for Inkit:
- Sign up for Inkit to get full access to advanced direct mail automation capabilities.
- Connect Inkit with your CRM or database with records of consumer data.
- Integrate letters using Inkit’s customer webhook (For detailed instructions on how to do this, click here).
- Include an advance notice of adverse action into the workflow (For example, you can automatically send a bank adverse action statement 7 days after the customer’s request is received.)
- Use the HTML letter format and variable data printing to automatically include the necessary customer’s details in the letter.
- Enjoy Inkit taking care of the print and mail process, while you focus on your core activities.
Direct mail automation reduces the time necessary to produce and deliver an advance notice of adverse action. In addition, Inkit’s dashboard shows what mail pieces were delivered and when. Such a record of the delivered mail is highly important in official communications with rigid timing.
Ready to entrust your official mailing to direct mail automation services? Or maybe start using mail marketing? Launch automated direct mail campaigns with Inkit now.