If you run a debt collection agency, one of the key tasks you’ll need to master is skip tracing. Skip tracing is a process used to find people who have become hard to reach, often because their contact information is outdated. Between 2017 and 2020, PDCflow teamed up with the California Association of Collectors (CAC) to provide helpful tips and advice on how to run a successful, compliant debt collection agency. This guide will break down the basics of skip tracing in a way that’s easy to understand, so whether you’re just starting out or looking to improve your current methods, this guide is for you.
What is Skip Tracing?
Skip tracing is simply the process of tracking down people who are difficult to find. These people, often referred to as “skips,” might have moved without updating their address, disconnected their phone, or changed their job. The purpose of skip tracing is to gather the correct contact details for these individuals so that your agency can reach out to them about unpaid debts.
Different Types of Skips
Before you start skip tracing, it’s important to know that not all skips are the same. Here’s a look at the different types:
- Company Skips: These happen because of mistakes made when entering data. For example, if someone’s address or phone number is entered incorrectly, it becomes much harder to locate them. Reducing these kinds of mistakes can be done by making sure documents are thoroughly checked and training staff to be careful when entering data.
- Unintentional Skips: These are people who have moved without letting their creditors know. For example, if someone changes their address and a bill is sent to their old address after the mail forwarding period has ended, the bill might not reach them. These people aren’t trying to avoid being found—they just didn’t inform anyone of their new address.
- Intentional Skips: These are people who are purposely trying to avoid being found. They might be trying to escape more than just debt collection—possibly other life circumstances they are trying to leave behind. These skips can be harder to find because they don’t want to be located.
- Skips with Criminal Intent: These are the people who are deliberately trying to hide, often using fake social security numbers or other tricks to avoid paying what they owe. These cases can be the most difficult to solve.
How to Choose a Skip Tracing Service
When it comes to skip tracing, using the right tools can make a big difference. Here are some simple tips to help you choose the best skip tracing service for your agency:
- Try Before You Buy: Many skip tracing services offer free trials. Take advantage of these trials to test the service out before committing to a purchase. One way to test is by searching for yourself in the system. If the system returns accurate information like your address, phone number, and email, it’s likely a good fit.
- Ask Around: Getting recommendations from other agencies can help you find a good service. Knowing what other agencies use and how much they pay can also give you an advantage when negotiating prices with vendors.
- Think About Your Needs: Consider how your agency will use the skip tracing service. Do you need a tool that allows unlimited searches? Is cost a major factor? If you’re dealing with large accounts, it might be worth investing in a more expensive service that provides more accurate information. Smaller agencies might want to look for more affordable options that still meet their needs.
Free Tools for Skip Tracing
In addition to paid services, there are also free resources you can use to help find missing consumers:
- Social Media: Websites like Facebook and LinkedIn can be very helpful in finding information about where someone lives or works.
- Public Records: Government records, like property ownership records or court documents, can also provide useful information.
Staying Within the Law
When skip tracing, it’s important to make sure you’re following the law. Here are some things to keep in mind:
- Permissible Purpose: Many skip tracing services get their information from credit reports. To use these services legally, your agency must have what’s called a “permissible purpose.” This means you need to have a valid reason, like collecting a debt that comes from a credit transaction, to access this information.
- Know Your Tools: Make sure you understand how your skip tracing service works and whether you have the right to access certain information. If your agency does not have a permissible purpose, you may need to use a service that provides non-credit report information.
- Policies and Procedures: It’s important to have clear rules in place about how your staff should use skip tracing tools. Misusing these tools, like searching for information on celebrities for personal reasons, can lead to serious problems, including loss of access to the service and legal issues.
Tips for Effective Skip Tracing
Getting good results from skip tracing isn’t just about having the right tools—it’s also about using the right approach. Here are some tips to help you get the most out of your skip tracing efforts:
- Keep Track: Make sure collectors are accountable by requiring them to include a consumer’s account number with each search.
- Protect Your Staff: Limit who can access social media during skip tracing to prevent staff from seeing inappropriate content or being tempted to misuse the information.
- Be Careful When Contacting Others: If you need to contact a third party to confirm someone’s location, do it carefully. You can only contact each third party once, and you must identify yourself and your company if asked, but don’t reveal that you’re trying to collect a debt unless directly asked.
- Attorney Representation: If the person you’re trying to reach is represented by a lawyer, you must only communicate with the lawyer and avoid reaching out to third parties or using skip tracing tools in these cases.
What Makes a Good Skip Tracer?
Having the right person in the role of a skip tracer is just as important as having the right tools. Here are some traits that make for a good skip tracer:
- A clear and confident voice when speaking on the phone
- Good listening skills to pick up on important details
- The ability to build trust with the people they talk to
- Patience and persistence in tracking down leads
- Creativity in finding new ways to locate people
- Honesty and a strong sense of discipline
Conclusion
Skip tracing is an important part of debt collection, helping agencies find people who have become hard to reach. By understanding the different types of skips, using the right tools, following the law, and applying effective strategies, your agency can improve its skip tracing efforts and increase its chances of collecting debts successfully.
