Skip tracing has been around for as long as consumers have borrowed and not paid back their debts - nothing new or profound there. However, like everything else, there are always new wrinkles and technologies to consider.
Is tracking the debt worth your while?
When considering spending time and money to locate a consumer, first ask yourself the following question: Are there reasons why you should not work the account? Reasons against working the account might include:
- The individual has declared (or at least filed for) bankruptcy
- The person is deceased
- The person may be active-duty military; if so, different rules apply
- The individual is litigious and has filed lawsuits against debt collectors in the past
- There are potential fraud indications (e.g., home address is a prison)
At minimum, any of the above factors might impact how you would approach working an account. Of equal importance is the fact that you may choose not to work the account at all and any time or money spent trying to skip trace would be a waste.
How deep and how fresh is the data?
The idea here is that filters are becoming a new consideration prior to skip tracing. Presuming you want to continue with skipping the account, the next step is to decide how deep to go and how much you want to spend. If you are trying to collect $50 parking tickets, you are going to use a different level of effort than you would to skip and collect $3,000 in credit card debt.
When looking for leads for new addresses and phone numbers, many companies in the industry provide this data. Most companies buy compiled data from the same sources and then repackage it using their proprietary searching algorithms.
Original sourcing of new addresses and phone numbers generally comes from just a few sources that include telephone company sources for listed landlines; real-estate transactional data; survey data collected from various sources, including Websites; the USPS® NCOALink® system for those licensed to sell it; and of course credit reporting agencies (if you have Gramm–Leach–Bliley permissible purpose).
Beyond new addresses and phone numbers, if the size of the debt is large enough to warrant the cost, there are companies that can provide asset data, specialized license data and even employment information.
Linkages and freshness also come into play with skip-trace sources. If John Doe moves from Illinois to California, how does the data source track him as he moves? While there may be sources that can identify John as having a phone number and address in California, how do you know it is the same John Doe who used to live in Illinois?
The USPS database that houses consumer filed change of addresses is a good source for providing this linkage, but not everyone trying to dodge a bill will file a Change of Address with the Post Office. A different method of knowing whether “your” Illinois John Doe has moved to California is needed. Credit reporting agencies have the edge here because they can track John by his Social Security number or address histories to be able to link him as he moves around the country.
What if no skip data is available? What happens if there is no new information available when you go to your skip-tracing vendor requesting new leads?
In the recent past, the only answer was to periodically resend your skip accounts to your vendor(s) to see if new information had surfaced. This approach is often referred to as “pulling data.”
This is still the way that most companies work accounts that they retain over a long period of time, but it can be inefficient and expensive. John may be in hiding, living with his parents again, or unavailable for any number of reasons. Today, there is a more efficient approach available.
Some data providers now have the ability to “push data.” Conceptually, this practice involves a collector sending a file of accounts to be monitored for activity. When a newly recognized address or phone number becomes available, the vendor will push the information out to the collector. This also is known in the industry as “triggering.”
From the collector’s point of view, this can yield great efficiencies because no labor (and in some cases, depending on the vendor, no dollars) has to be invested in the account until new leads become available for follow-up. It allows for an efficient method of working old inventories of collection accounts.
When used properly, it also may give the collector the advantage of being the first one in line asking for dollars before other collectors are aware of the new contact information. Overall, because of the efficiencies to be gained, it may be feasible to work lower-balance accounts longer and still make a profit.
The trick from the vendor’s point of view is being able to tie the new information to a specific consumer. Again, NCOA moves are easy to understand, but frequently they are only a fraction of the moves of individuals yearly. Merely having the presence of the John Doe at his new California address is not enough.
A method of linking the California John Doe to the previous Illinois John Doe is critical to being able to recognize and push out the new move information. Vendors such as the major credit reporting agencies have an advantage here in that they all have strategies that revolve around building an internal persistent identification number and using their proprietary matching logic to pull together a total picture of the consumer as he or she moves.
Scrubbing accounts for bankruptcies is not an original concept, but concurrently looking for other important reasons to not work an account prior to skip tracing is a new, evolving concept. Filtering accounts to determine whether they should be worked at all - and taking into account special circumstances - is a new consideration.
Finally, using triggering or push concepts when the first attempts at skip tracing come up empty is another new tool to add to the collector’s arsenal.
Rollin Girulat is the Senior Collections Product Marketing Manager at Experian.
Experian is a nonexclusive full-service provider licensee of the United States Postal Service. The following trademarks are owned by the United States Postal Service: USPS NCOALink, Post Office. The price for Experian’s services is not established, controlled or approved by the United States Postal Service.