What is skip tracing in debt collection?
Debt collection skipper tracking – the art and process of tracking down someone who has “left town” – is as old as debt collection and law enforcement. Some techniques for tracking skippers have remained largely unchanged, although the technology, scale and speed at which they are used, and the practice has evolved. When it comes to debt collection, skip tracing an account is often a necessary step to establish Right Party Contact (RPC), and there are many ways to reach debtors today, including emails, calls, text messages and social media accounts and physical mail.
However, debt collection agencies do not always have all contact information in their files or permission to contact debtors through certain channels. The records they receive from creditors, previous debt collectors, and previous searches may also be out of date, and verifying current contact information can be expensive and time-consuming.
This is where the latest skip tracing tools come into play. By accessing various public and private databases, debt collectors can quickly and accurately update and validate debtors' contact information to increase their RPC rates.
The debtor's contact details can change frequently
Contact information can become outdated when someone gets married or divorced, moves, opens a new email account, changes a phone number, or starts a new job.
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Between 2018 and 2019, about one in 10 Americans moved each year, and most people who moved stayed in the same county (65 percent) or state (17 percent). In general, mobility has declined – in the 1980s, almost one in five Americans moved every year.1 However, some households move more frequently.2 Some may also have difficulty paying bills on time, especially as costs for housing, health care, and other necessities rise.3
Email addresses and cell phone numbers may not change as often as they tend to be retained when moving. But unlike addresses, many consumers have two or more email addresses and phone numbers. Experian's data shows that more people had two or three phone numbers linked to their files than just one, and over 28.5 million net new phone lines were added to the database between 2018 and 2021.
Multiple data points can be helpful for collectors, but only if you can actually make contact. Many consumers may use an alternative email address that they rarely check when expecting marketing emails. The increase in spam and fraud is also making consumers less likely to respond to incoming calls and text messages – according to Hiya's 2022 State of the Call Report, 94 percent ignore unidentified calls because they may be fraudulent.4
The latest skip tracing tools can be helpful
For years, searching for missing people was a largely manual process that involved searching public records and contacting friends, family and employers to inquire about a person's whereabouts.
Today, investigators may still search public records and private databases for leads and current contact information. But the search can also penetrate deeper into the digital realm, for example in social media profiles and job boards where CVs are stored.
The latest solutions do not completely eliminate the need for manual intervention, especially when a debtor is trying to avoid being found – as opposed to someone who has forgotten to update their contact information. However, skip tracing tools can automate many processes for finding, organizing, and deduplicating information. The tools can also help you quickly uncover potential connections with matching algorithms, evaluate results, and review your internal data to highlight potential errors or outdated contact information.
Debt collection software can also help you prioritize accounts based on your criteria, such as: B. the debtors' willingness to pay or the highest expected recovery amounts. You can then focus your skip tracing efforts on the accounts that are most worth tracking. And when everything is put together, systems can automatically populate your queue to ensure your debt collectors always reach the right debtors at the right time.
Read more: Four Ways to Optimize Your Debt Collection Efforts
How Experian can improve RPC rates
With Experian's TrueTrace™ and TrueTrace Live™, you can find consumers' current addresses and phone numbers via the cloud or through manual data transfers. These tools include proprietary data on over 245 million consumers, including 100 million thin-file consumers, unlisted phone numbers, alternative financial services data and Experian® RentBureau® data. We have seen customers achieve a 10 percent increase in their RPC rates after implementing TrueTrace. Phone Number ID™ with Contact Monitor™ can also provide real-time verification of phone ownership and type using data from more than 5,000 local exchange providers.
Before attempting to contact a contact, mitigate compliance risk by using FirstSweep℠ to identify accounts that require special treatment, such as: B. Accounts of deceased consumers, active military personnel, disputed debtors, or someone who has declared bankruptcy.
Actively monitor your accounts with Collection Triggers℠ using custom criteria that send an automatic notification when there is a relevant change, such as: B. a new employment or trade line activity.
Although Experian offers some of the most advanced skip tracing solutions, it is our end-to-end debt collection solutions that give us – and our debt collection customers – a competitive advantage.
Contact Experian to learn more about TrueTrace and our other collection tools.
Sources
1. Harvard University Joint Center for Housing Studies (2020). Are Americans stuck?
2. FiveThirtyEight (2015). How often does the average person move?
3. Pew Research Center (2022). One in four parents in the U.S. say they have had difficulty affording food or housing in the past year
4. HIYA (2022). Status of the call for applications 2022. [White Paper]
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