Skip tracing is a paid service using which anyone can find the latest contact information of a person, this includes their present address, employer, phone number and more. The cost of skip tracing varies from $50 to $175 per person.
In short, Skip-tracing is the process of tracking down individuals.
Cheaper Option – Use a Collection Agency
Using debt Collection Agencies is a lot cheaper option (actually a steal). For approximately $15 an account they will.
- Perform skip-tracing on a person to find his latest contact information. Yes, skip tracing is free.
- Send five demand letters to your debtor.
- Verify if the person has filed for bankruptcy or has deceased.
- The debtor pays you directly, no other cost involved.
Collection agencies buy a bulk subscription from these Skip Tracer Services, so their cost of locating a debtor is a fraction of what it would cost you to find a single debtor. They buy thousands of accounts at a time and keep using them gradually.
Where to Skip Trace Yourself
If you want to skip trace yourself, here are a few services. They range from $50 to $175 per account.
1.) Accurint by LexisNexis www.accurint.com/collections.html
2.) TLOxp by TransUnion www.transunion.com/product/tloxp
3.) First Search By Equifax: www.equifax.com/business/firstsearch/
4.) IDI Data ididata.com/skip-tracing/
5.) MicroBilt Skip Tracing www.microbilt.com/product/skip-tracing
Need for Skip Tracing in Debt Collection
What if you send a bill to your customer/patient/debtor, and it comes back as non-deliverable or if you try to contact them on the phone number listed in your records, but it no longer works? Suddenly your installments appear to be non-collectible.
The biggest mistake which most creditors make is to keep an unpaid account aside for weeks thinking what to do about it, even though their own repeated attempts to contact the debtor have consistently failed. Waiting on this account any longer means you are letting this delinquent account become older, drastically lowering the chances to recover money from this account.
What is Skip Tracing or “Skip” Status?
In the collections industry, a debtor whose contact information has changed or if the address/phone provided by the creditor is no longer valid, then the account categorized in “Skip” status. It requires to be skip traced. They do not charge anything extra to their clients for it.
If the debtor is unreachable, what will a Collection Agency do?
For collection agencies, “Skip” status or a “Missing debtor”, This is a fairly common situation. An experienced collection agency has many tools and tricks to find the debtor’s latest contact information.
Collection agencies do not acquire this information themselves but pay Skip Tracers who collect this data from the following sources and sell it as a service. This may include
1) Information on the debtor’s latest credit application.
3) Phone books
4) Post office/USPS
5) Utility companies
7) Voter registration records
8) Credit bureaus.
9) Reverse address/phone lookup sites
Most common reasons why debtors are unreachable:
1. Unreachable landline number: These days a lot of people are ditching their landline for cell phone. In such cases, the debtor may have the intention to pay, but he did not realize that the creditor needs to be informed about his phone number change. Leaving you to do all the detective work.
2. The debtor has relocated: This could be because of a job change, divorce, retirement, health issues or other genuine relocation reasons. The debtor is surprised when contacted on his new address or phone number, but his intention is not to go in hiding or not to pay.
3. Intentionally hiding: This could be because the debtor is in some legal trouble, or hiding from the police or even from his family members. May be the debtor has to pay money to other creditors like you and decided to go in hiding. Regardless of the reason, such debtors are hardest to locate, and it’s even harder to collect any money from them. They might have given you the wrong information about themselves while buying your product or service. In worst circumstances, it might be a case of identity theft too. These kinds of cases need to be handled very carefully.
Letting a collection agency handle Skip Tracing and Collections is a cost-effective solution:
There are many Skip tracing techniques. But creditors (or companies) have to shell out money to purchase access to this information. Therefore it is better to hire a collection agency that already has access as part of their services. Skip tracers should be compliant with the federal and state laws controlling access to public records.
Collection agencies are super-efficient. Factor in the amount of time, stress and energy you or your staff will put into these kinds of efforts. Is your staff even trained for such detective work? Plus add the cost of those staff-hours of your employees that they spend on this task (their salary, office space, insurance etc.), therefore assigning this account to a collection agency almost always turns out to be much cheaper and an efficient option.
Skip-tracing has always been an important part of the debt collection process. Collection agencies are able to quickly get access to public and proprietary data from thousands of proven sources by using paid skip tracing services. Although there is no guarantee that a collection agency, even with all its resources and tricks will certainly be able to locate the debtor, however, the chances are far better than what your untrained in-house employees would do.
Other interesting information
Sometimes, skip tracing process reveals additional information like – If the debtor has declared bankruptcy, has deceased, in active military duty ( if so, different rules apply), or if the person is known to file lawsuits against the debt collectors or creditors. Any of these reasons will likely discourage even a collection agency from performing any debt recovery efforts.
It is possible that the debtor was not found during the first round of Skip Tracing, but with advancements in technology, it is now possible for Skip Tracers to report once there is a hit on a later date. This automatic process is called “triggering”.
Most Common Skip-Tracing Services
The USPS provides basic skip tracing. A popular skip tracing service is “Accurint for Collections” by LexisNexis. Skip tracing services provided by major credit bureaus are also extremely popular. TransUnion’s TLOxp, Experian’s MetroNet and FirstSearch and Finders by Equifax are other popular skip tracing services.
Video: What is skip tracing?