What is Skip Tracing?
Skip tracing is a specialized service to locate a debtor’s current address, employer, phone number, and financial status. Advanced skip tracing services can reveal further details like assets, spouse information, Social Security Number (SSN), and date of birth. Typically, skip tracing costs between $50 to $175 per lookup, though collection agencies often pay mere cents per search due to their bulk usage.
Why Use a Collection Agency for Skip Tracing?
Hiring a collection agency is significantly cheaper—usually around $15 per account. They provide:
- Free skip tracing to locate the debtor.
- Multiple demand letters sent to your debtor.
- Checks for bankruptcy or deceased status.
- Direct payments to your account without extra costs.
Collection agencies achieve lower rates because they subscribe to skip tracing databases in large volumes, dramatically cutting costs.
Caution: Skip tracing can sometimes yield outdated or incorrect data, particularly phone numbers and emails, so use results judiciously.
Who Uses Skip Tracing?
- Debt collectors
- Private investigators
- Bail bondsmen
- Process servers
- Repossession agents
- Journalists
These professionals use skip tracing ethically within legal privacy limits to locate individuals who have “skipped” their obligations.
Common Information Uncovered by Skip Tracing:
- Addresses: Current and previous residences.
- Phone Numbers: Mobile and landline.
- Employment History: Current and past jobs.
- Relatives & Associates: Contacts who might provide leads.
- Business & Property Records: Ownership details.
- Social Media Profiles: Locations, behaviors, and connections.
- Vehicle Registrations: Details on owned vehicles.
Importance of Skip Tracing in Debt Collection:
When your debtor’s phone number is inactive or their mail is returned undeliverable, immediate skip tracing is critical. Every day delayed significantly reduces recovery odds:
- After 90 days, recovery rates drop below 70%.
- After 180 days, recoverability drops to around 50%.
Common Reasons Debtors Are Unreachable:
- Changed phone number: Debtors often switch to mobile numbers without informing creditors.
- Relocation: Due to job changes, divorce, or retirement, debtors move without updating creditors.
- Intentional hiding: Debtors avoiding legal or financial obligations, making them extremely difficult to trace.
Why Let a Collection Agency Handle Skip Tracing?
Using a collection agency saves your business significant time, cost, and stress. Agencies have trained professionals using advanced databases, making their success rate notably higher than in-house efforts. The savings from employee hours and resources far outweigh the minimal cost of agency services.
Additional Insights:
Skip tracing can also uncover if debtors:
- Declared bankruptcy
- Are deceased
- On active military duty
- Regularly file lawsuits against collectors (a critical consideration for debt recovery)
Moreover, modern skip tracing includes an automated feature called “triggering,” notifying collectors instantly when new debtor information emerges.
Popular Skip-Tracing Providers:
- USPS (basic address checks)
- Accurint for Collections by LexisNexis
- TransUnion’s TLOxp
- Experian’s MetroNet
- Equifax’s FirstSearch
Efficient skip tracing significantly increases debt recovery effectiveness, making it indispensable for creditors and collection agencies alike.
Video: What is skip tracing?