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11 Strategies to Improve the Science of Skip Tracing

Skip tracing is part art and part science. The science involves leveraging technology. I’d like to share 11 strategies to improve how you use technology to improve the science side of skip tracing. Utilizing skip trace technology is a business- growth engine because it takes care of “easy” day-to-day activities like phone number identification and change of address, while at the same time working harder to solve overarching skip trace challenges like optimizing allocation of resources.

You want to stay relevant to your customers so that your business grows despite the jungle of compliance regulations that you wade through every day. That’s not easy to do because of the fast-paced, ever-changing and highly-competitive nature of today’s environment for the collections industry. Growing your business, while mitigating compliance risk is a top priority, and skip tracing is an important element that can help. Below are 11 best practices for effective skip tracing efforts that you should begin implementing now.

1. Don’t De-Dupe

Instead of de-duping in your batch process, have your data provider flag and return duplicate data that still seems to be good. This way, you’ll remain focused on quality data and avoid getting bogged down by progressively worse data. By confirming instead of de-duping, your business becomes more efficient.

2. Use Predictive Analytics

Optimize your use of predictive analytics. This can be done in two ways: first, by using contactability and recoverability scores to sort and prioritize your portfolios. With prioritized accounts, agencies can strategically assign resources, data spend and treatment approaches. Second, use predictive analytics to select and rank phone numbers. This more modern approach allows for you to make contact with the consumer sooner and with fewer failed attempts.

3. Monitor for Changes

One of the most underutilized technologies is monitoring for skip data changes. A study conducted in 2015 on Lexis Nexis phones found that in the first month of monitoring, there was a 10% lift in right-party contacts and that lift continued month-over-month. Enhance your batch processing with change alerts on all data types including phones and address.

4. Test your Cell Phone Data Providers

It’s imperative for collection agencies to use technology to identify cell phones, but just as you test various phone number providers, you should also test cell identification providers. Also, leverage technology to identify real-time ownership of the cell number. You should test to make sure you’re protecting your agency from TCPA (Telephone Consumer Protection Act) violations, while maintaining the ability to contact consumers on cell numbers. This is another great element to monitor for changes.

5. Filter out the Noise

Avoiding hampering your process and resources by removing “uncollectable” accounts. Identify consumers who are bankrupt, deceased, incarcerated or a contact risk due to litigious history. You can further filter out, by identifying employment status, property ownership status or consumers with judgments and liens.

6. Solve for Multiples

Leverage services provided by both your software provider and your data provider to identify and link multiple entries of the same consumer in your database. While you’re at it, cleanse your data to ensure the John Smith you are about to call is the right John Smith.

7. Identify Consumer Relationships

Contacting third parties is a critical part of skip tracing, but before you call, make sure you know whom you are calling. You should work with technology able to identify the phone number as being a lead to the consumer or a direct line to the consumer you are skipping. Doing so will help mitigate FDCPA (Fair Debt Collection Practices Act) and UDAAP (unfair, deceptive, or abusive acts and practices) risk, which come with very steep fines you will want to avoid.

8. Don’t Ignore the FCRA

If you’re using data from an aggregator to make collection decisions, like payment plans or suit qualification, then the data must be FCRA (Fair Credit Reporting Act) regulated. For example, POE (place of employment) and POE phone data that are not FCRA regulated can only be used for contacting and locating the consumer. POE and POE phone data that are FCRA regulated can be used to make suit decisions. Being ahead of the compliance curve by using FCRA data will help agencies win business with creditor clients. Creditors are more in-tune with compliance and they use compliant vendors more than ever. FCRA compliant data allows agencies to show their creditor clients that they have gone the extra mile to make sure they are using data correctly.

9. Update Content Versions

Innovative data providers constantly enhance their products. Make sure you have a process in place that keeps you up-to-date on their latest product versions and don’t forget to include regular product training for your users. You could have the best product on the market, but if no one knows how to use it or optimize it, then you’re missing a huge opportunity. Get your users on a regular training schedule. Training makes employees more productive and successful. And a successful collector is more inclined to be a loyal employee.

10. Have a Testing Plan

Grow your internal data testing competencies or outsource them to a firm who can help you get it right. Testing data quality is a complex process that is often over-simplified. Taking the time to test with rigor, and integrity is critical to your collection success and bottom-line. Test results should dictate which data provider a company uses. The better the testing practices, the better the agency will be at making an accurate assessment. This decision will fuel the agencies business for months (until another test is performed), so a wrong decision can lead to months of lost opportunity and unnecessary expense.

11. Validate Data Integration with Your Software Provider

Don’t assume your collection software provider is always up-to-date with integrating skip trace solutions. If you want the latest and greatest, then you may need to go directly to the data provider. Have your data provider explain any gaps in what’s integrated and what’s the best available, so you can make an informed decision. You may think you are getting the best that your data provider has to offer when in reality you are only getting the best of what has been programmed by your software provider. These eleven best practices enable you to do more with less, stay in compliance and stay current. When you have increased contact with the right consumers, you experience increased dollars collected and that equals business growth. By implementing these best practices, you’ll be able to lead the way in regulatory compliance by leveraging automated processes and analytics that allow human resources to focus on the challenging tasks.


Jason Horsley is the director of collections and recovery at LexisNexis Risk Solutions.

Collection Education Exam - March/April 2018

The importance of keeping abreast of new developments in regulation, technology and collection techniques cannot be overstated. The following Collection Education Exam is a quick way of reviewing the information covered in the March/April 2018 issue of Collection Advisor. The answer key is available at the end of this exam. However, if a question has you stumped, it is a good idea to go back to review the issue and to make sure you do not miss any valuable information.

1. According to columnist Sam Eidson, what can make the difference between a cohesive collection floor versus one that is dysfunctional?
A. Creating the right culture and managing personalities
B. A well-calibrated compensation structure
C. Making sure upper management development does not interfere with the collection floor
D. An assigned compliance officer


2. According to columnist Sam Eidson, collection managers should look out for what problem caused by dialer systems?
A. Attendance-challenged
B. Prima donnas
C. Dialer zombies
D. Headset potatoes


3. According to columnist Fred Blitt, what is a tactic dubious consumer law firms practice to generate FDCPA violations?
A. Baiting A/R professionals on the phone
B. Switching names
C. Coaching consumers
D. Both A and C


4. According to columnist Fred Blitt, a predatory consumer firm tactic involves trading out the term “dispute” with _________ in form letters?
A. Disagreement
B. Amount discrepancy
C. Balance not accurate
D. Conflict


5. According to columnist Ron Brown, what is a type of location tool, which allows a network administrator or Internet service provider to differentiate one computer from another?
A. MX record
B. IP address
C. ISP
D. I/O address


6. According to columnist Ron Brown, you can ping an ________ to check its validity.
A. MX record
B. IP address
C. ISP
D. I/O address


7. According to columnist Nick Jarman, what factor must a A/R professional consider when deciding between manual and batch skip tracing?
A. Small balance
B. Low score
C. Bad demographic
D. All of the above


8. According to the Who’s Who in Compliance 2018, which of the following is not something described as an aspect of compliance accounts receivable professionals should act on in 2018?
A. Data Security
B. Awareness training
C. Compliance checklist
D. Risk assessments


9. According to columnist Debra Ciskey, what was a major cause for lawsuits in 2017?
A. Interest accrual disclosure
B. Bar codes
C. Exposing confidential information
D. Mini-Miranda disclosure


10. According to columnist Debra Ciskey, the recent Avila v. Riexinger & Associates case suggested A/R professionals are safe so long as:
A. Letter language is not “bizarre or idiosyncratic”
B. It is stated that the balance in the consumer’s letter will increase over time
C. The balance of the account is not specifically stated in the letter
D. None of the above


11. According to columnist Debra Ciskey, letters must be closely examined to avoid words that could be misinterpreted. Which of the following is not a listed phrase to be avoided?
A. Balance due
B. Principal balance
C. Current balance
D. All are listed


12. What percentage of surveyed parents paid their children’s student loan debt?
A. 10%
B. 14%
C. 18%
D. 20%


13. According to Jason Horsley, what should an A/R professional do when working a batch of account contact info to remain focused on quality data and avoid getting bogged down by progressively worse data?
A. Avoid de-duping
B. Ask consumers for alternative contact info
C. Confirm over the phone the appropriate contact has been made
D. Develop your waterfall technique


14. According to Jason Horsley, how can an accounts receivable professional optimize the use of his or her predictive analytics in skip tracing?
A. Prioritizing portfolios using contactability scores
B. Prioritizing portfolios using recoverability scores
C. Utilize predictive analytics to rank phone numbers
D. All of the above


15. According to Jason Horsley, what regulation should an A/R professional keep in mind when deciding how to use certain types of consumer contact information?
A. TCPA
B. FDCPA
C. HIPAA
D. FCRA

 

Answer Key

1. A
2. C
3. B
4. C
5. B
6. B
7. D
8. C
9. A
10. B
11. A
12. D
13. A
14. D
15. C

A Map to Online Skip Tracing Data

There is no correct way to scour the Internet for data on a consumer. The troubling thing about this is that means there isn’t exactly a defined wrong way to do it either. Does a particular website have accurate data? Does this other one charge too much for the data it supplies? Am I breaking the law by using this website for this reason? All of these are questions that need to be answered on top of the burdensome task of locating a skip. The following websites are resources a collection professional/skip tracer may want to include in its tracing efforts.

Basic Search

This first group of websites range from the obvious to the less-known. These are often the first stop in a tracer’s pursuit of a skip.

www.google.com

www.dogpile.com

www.infospace.com

www.duckduckgo.com

Social Media

Social media websites are vast and continually changing pool sources. This works to both its advantage and disadvantage; there is a lot of information there but who knows how valid it still is as the skip may have moved his or her focus to another forum. The demographic for each of these websites varies so a marketing mind would be beneficial. • www.facebook.com

www.linkedin.com

www.twitter.com

www.jigsaw.com

www.blackplanet.com

www.flickr.com

www.tagged.com

www.pipl.com

www.skipease.com

Government Sources

Several of these websites can come in handy a little further into a trace. Immigrations and Customs as well as the Bureau of Prisons give a tracer the opportunity to quickly search for a skip. Other sites listed here provide lists of government sites that could prove helpful when looking for information on domestic and international skips.

• www.archives.gov • www.sagal.com/ajax

• https://locator.ice.gov/odls/homePage.do - U.S. Immigrations and Customs.

• www.bop.gov - The Federal Bureau of Prisons.

• www.pacer.gov - The Public Access to Court Electronic Records does not directly charge users of the system but does have a $0.10 per page charge as dictated by the Judicial Conference of the United States.

• The website of the skip’s respective county appraisal district can normally reveal valuable information about a skip. Different county’s websites vary in intuitiveness making this task easier or more difficult.

• Visit the website of the skip’s respective secretary of state to perform a UCC-1 (uniform commercial code) search and request a financing statement revealing if the skip has financed property, what the property is, and corresponding information about the skip. There is normally a charge but the resulting documentation can be very enlightening.

Miscellaneous Sources

The following websites are a few more a collection professional should consider when looking for data on consumers. These sources can lead a collection professional to additional websites where they may discover additional useful sources. Some of these are free, some of them cost, and some offer a limited number of free searches.

www.blackbookonline.info

• www.dobsearch.com - A user receives seven free basic searches in a 24 hour period.

• www.pimall.com/nais/SKIPTRACE.HTM [Notes the caps]

Paid Services

If automation and speed are paramount, the use of a skip tracing vendor could be the right choice. Several of many options are listed below.

• www.ididata.com - IDI

• www.LocateSmarter.com - LocateSmarter

• www.melissadata.com - Melissa Data

• www.microbilt.com - MicroBilt

• www.oneclick-data.com OneClick-Data

• www.pdjservices.com PDJ Services

• www.clear.thomsonreuters.com Thomson Reuters

• www.skiptracers.com - VeriFacts

Required Documentation for Buying or Selling Debt

Due to the lack of formal proposed rules from the CFPB, which would provide much-needed clarity in the receivables management industry, the Receivables Management Association (formerly DBA International) is forced to look for guidance elsewhere. This must be done to provide industry participants with guidance to ensure compliance with regulators and policymakers at both the state and federal level. It is the philosophy and guiding principle of RMA to work with the entities that oversee the industry to achieve appropriate consumer protection without putting up artificial barriers to the collection of legitimate contractual obligations (debt).

This article provides guidance on documentation. At the most basic level, the purpose of documentation is to ensure that one is collecting a debt from the right consumer and for the correct amount. While there are many ways to ensure these two items, standards are both needed and desired.

To this end, developing the documentation standard for the RMA certification program included scouring state laws and regulations, CFPB consent orders, as well as guidelines from the Office of the Comptroller of the Currency (OCC) and the Federal Trade Commission (FTC) to glean their expectations. The current standard includes items that must be obtained as well as items that are desirable. The standard has gone through many changes, but today, in version 5.0, it requires:

Required Data & Documents for Receivable

When purchasing or selling receivables, a Certified Company shall obtain or provide at the time of the transaction the following account-related information:

1. The consumer’s first and last name.

2. The consumer’s Social Security number or other government issued identification number, if obtained by the creditor.

3. Consumer’s address at Charge-Off.

4. The creditor’s name at Charge-Off.

5. The creditor’s address at Charge-Off.

6. A copy of the signed contract or other account level document(s) that were transmitted to the consumer while the account was active that provides evidence of the relevant consumer’s liability for the debt in question. Other documents may include, but are not limited to, a copy of the most recent terms and conditions or a copy of the last activity statement showing a purchase transaction, service billed, payment, or balance transfer.

7. The account number at Charge-Off.

8. The unpaid balance due on the account, with a breakdown of the post- Charge-Off Balance, interest, fees, payments, and creditor/owner authorized credits or adjustments.

9. The date and amount of the consumer’s last payment, provided a payment was made.

10. Sufficient information to calculate the dates of account delinquency and Default.

11. The date of Charge-Off.

12. The balance at Charge-Off.

13. A copy of a statement that reflects the Charge-Off Balance.

14. A copy of each bill of sale or other document evidencing the transfer of ownership of the debt from the initial sale by the Charge-Off creditor to each successive owner that when reviewed in its totality provides a complete and unbroken chain of title documenting the name, address, and dates of ownership of the creditor and each subsequent owner up to and including the Certified Company.

In addition to the aforementioned required items, purchasers should use commercially reasonable efforts to obtain, if available:

1. If there was a legal change in the consumer’s name during the life of the account, the prior name(s) used on the account.

2. The consumer’s date of birth. 3. The consumer’s last known telephone number.

4. Consumer’s last known email address.

5. The store or brand name associated with the account at Charge-Off.

6. The opening date of the account.

7. Pre-Charge-Off account number(s) used by the creditor (and, if appropriate, its predecessors) to identify the consumer’s account if different than the Charge-Off account number.

8. Such other information it deems necessary to substantiate in a court of law the legal obligation, the identity of the person owing the legal obligation, and an accurate balance owed on the legal obligation.

While the standard is written for the purchase and sale of debt, it should be noted that anyone collecting on behalf of a Certified Debt Buyer needs to either be Certified or meet the standards of Certification (Vendor Management Standard) and quite frankly, it is best practice. Therefore, it is truly an industry standard that, when universally adopted, will undoubtedly go a long way to clean up the industry and provide necessary consumer protection.


Mark Naiman is President/CEO of Absolute Resolutions Corp., an active debt-buying company, and currently serves as President on the Board of Directors for Receivables Management Association.

Jan Stieger, CAE, serves as Executive Director of Receivables Management Association the trade association representing nearly 550 member organizations in the accounts receivable industry.

Legal Collection Software Checklist

The following is a checklist collection professionals can use to help objectively determine which legal debt collection solution to select. Agency decision makers (evaluators) rank each one of the listed features on a scale from 1 to 5 in their respective column based on the feature’s importance to the agency (1 being least important and 5 being essential). Then in the “Software Possesses Functionality” column, decision makers can check off whether or not each feature is possessed by various prospective collection solutions. The final section on this checklist is composed of features suggested by collection software vendors for consideration.

Budget: ___________________________
Decision Makers: ___________________________
Date of Re-Evaluation: ____________________________

Legal Collections Functionality

Evaluator 1 Evaluator 2 Evaluator 3 Product Possesses Functionality  
        Integrated with pre-legal collections
        Integrated with Microsoft Word
        Track multiple cases for each account
        Multiple, configurable lines of legal business
        History of legal actions
        Held billings
        Release/approve billings for invoicing
        View legal documents history
        Unlimited number of liable and non-liable parties
        Individual case party statuses
        Track party garnishments
        Track party services
        Track party judgments
        Case and case party tasks scheduled automatically
        Multiple check requests based on court requirements
        Multiple legal documents based on court requirements

 

Recovery Functionality

Evaluator 1 Evaluator 2 Evaluator 3 Product Possesses Functionality  
        Pre charge-off collections
        Post charge-off recovery
        Agency/attorney management
        Asset sales
        Automated file processing
        Repossession tracking

 

Pre Charge-Off Collections Functionality

Evaluator 1 Evaluator 2 Evaluator 3 Product Possesses Functionality  
        Disputes/deduction codes can be assigned
        Identifies and tracks problem invoices
        Coded problems separates from other receivables
        Offers customer and invoice-level notes
        Electronically reproduces/transmits invoices

 

Vendor Recommended Functionality

Evaluator 1 Evaluator 2 Evaluator 3 Product Possesses Functionality    
        Import demographic changes via spreadsheet Contributed by: Hubbard Systems
        Import financial transactions via spreadsheet Contributed by: Hubbard Systems
        Re-classify costs as recoverable/non-recoverable Contributed by: Hubbard Systems
        Reimburse clients for non-recoverable costs not collected from consumers Contributed by: Hubbard Systems