When a consumer fails to pay off the debt or delays payment for more than 180 days, the 3rd party debt collection agencies are called on the board to recover those delinquent accounts and start the cash flow again. Frequently, a consumer feels to run out of options to pay off the debt or consider himself/herself completely unable to pay the amount and stops responding to the communications by the creditors or the debt collection agency. Therefore, the debt collection agency may break the communication line and find other ways of communication.
If a borrower moves from the residence without updating the creditor about the new address, communications based on letters will be lost entirely. 95% of debt collection agencies send letters, and it can drag to an enormous drop-off! Consumers with substantial debt burdens may move out, knowing that their debts will not ever disappear. If they frequently keep changing their addresses, how can they track down them to dissolve the accounts?
What is skip tracing?
Skip tracing is the process attempted by the collectors to locate the consumers who have fled without paying the debts. The skip tracing term is derived from the phrase ‘to skip town,’ and it may seem like the consumers have absconded intentionally to stay out of the creditors’ reach.
Commercial Skip Tracing
In commercial debt collection, the skip tracing begins from the credit application. The credit app provides the 3rd party debt collection agencies plenty of information, such as –
- Cell phone numbers
- Further email addresses and phone numbers
- Secondary name and business location
- Vendor or bank names used as references
- Other individuals involved in the business
Skip Tracing a Personal Guarantor
If unable to access the guarantor’s credit report, the skip tracer will begin to search online for Uniform Commercial Code (UCC) filings. The various databases and other resources that can be accessed in this search include:
If a personal guarantor has been identified for commercial debt, the skip tracing process turns out to be like a consumer skip trace. In the end, the federal and state consumer protection regulations come into the picture.
For example, the skip tracer might need to access the guarantor’s credit report only if the creditor has permission to access the original credit application. If the skip tracers cannot access the credit report, they will take another avenue. It is to search online for UCC or Uniform Commercial Code. The resources and database that are included in this search are –
- Phone number databases
- Credit card applications
- Loan applications
- Social media
- Driver’s license
- Professional licenses
- Utility bills
- Public tax information and other similar records
- Vehicle registration records
- Landlord or property owner information
How is skip tracing conducted?
Skip tracing is necessary to close the long-forgotten delinquent accounts. The skip tracers can collect as much information as possible about a consumer to clarify their updated and most accurate information. Skip tracing is digitally updated and armed since the traditional collection routes are inclined to the digital approaches.
The major credit bureaus offer powerful and data-driven digital skip tracing tools to help the users with the latest contact details. The tools help in drawing the accessible lists of user data to locate the consumers who may have kept their information updated elsewhere online including –
- Credit files
- Other proprietary lists acquired by the company
- Local exchange carrier listings
- White pages
Some 3rd party debt collection agencies often retain an interested and keen skip-tracing service to get information on the hard-to-reach accounts. Unfortunately, some of the accounts can be lost entirely but using the right tools, and the debt collection team can reduce the total number of skipped out customers.
Another important step the skip tracers follow is gathering the phone numbers and email addresses from authentic contact points. A consumer may try to escape intentionally if they feel the creditor is being aggressive, abusive, and harassing in the collection process or there is no suitable payment plan or they cannot simply pay off the debt. Nurturing relationships with the customers who have delinquent accounts may seem to appear counter-intuitive to some businesses but when it comes to the strategy of debt collection agencies, maintaining a positive consumer experience and relationship is the forefront approach.
The debt collectors and the creditors use the skip tracers to find people. The skip tracers use high-end techniques and traditional methods including email address, telephone books, Social Security Number, public records, call records, domain name lookup, prison inmate lookups, military and Selective Service lookups, apartment locators, professional license lookups, business and corporate records, eBay seller searches and even hunting and fishing licenses.
Final Wrap
It is all about creating a new payment plan according to the convenience of the debtor at any time of the debt lifecycle. Maintaining a relationship with the consumers proactively will help make a new payment plan that consumers can afford. To effectively contact the debtors, the collection teams must acclimate to changing consumer preferences and encourage them to control their finances.
You can hire a debt collection agency that is enabled with skip tracing service. The collection agencies know the best implementation way of such ideas to recover delinquent accounts.
