Some time ago, the process of locating and gathering information about a debtor, or skip tracing, became a commodity. It is easy to get the information and the demand remains high. However, there is little differentiation among those companies providing the data. When an end user is presented with new address or phone number data in the collection software, rarely do they know where the information came from. It is true some collection software platforms can track or flag the source of the data, but the source cannot be derived by simply looking at the data. Let’s look at the differentiation available and some ideas for agencies to streamline their skip tracing processes.
Skip tracing service providers offer a variety of solutions. Free services, one-time fee services, real-time services and subscription services are commonly offered. Free skip tracing should be discarded. Although the obvious economic reasons are appealing, free skip tracing requires a staff, a high volume of manual intervention, inconsistency in effort and procedure and integration with the collection software, which is non-existent. You get what you pay for and free usually doesn’t cut it. We have all heard this before.
One-time fee services are commonly referred to as batch skip tracing. Batch mode is generally very consistent and integrated. The data is requested and received one-time, usually overnight, and automatically fed into the collection software. An agency can and should build all sorts of data handling rules to not only electronically load the data into the system but also set a level of reliability on the data and whether or not a verification process is required. What’s important is capturing all the data. After all, you are paying for it.
Batch is a good method when the agency has a need to process many debtors and having the updated information immediately is not important. Real-time services are similar to batch in terms of consistency and integration. The difference is in the timing. Real-time skip tracing is the fastest way to get updated or receive new information. It is usually accomplished in the collection software using a preprogrammed button or workflow where a request is sent to the service provider and a response is received real-time or near real-time. The concept of the data going straight into the software and the data handling rules as used in batch mode can apply.
A subscription model can be implemented for both batch and real-time. The beauty of a subscription model is that any debtors sent to the skip tracing service provider are “monitored” regardless of whether the request is sent in batch mode or real-time mode. This is attractive to agencies because the technology is always on. The provider will deliver a response on the initial request and monitor the debtor record for a predefined term. If at any time during the term the provider receives new information, it will automatically be delivered to the respective agency. Due to the nature of the service, the subscription model is commonly referred to as “monitoring.”
Excluding free services, technology and automation is largely well-defined and reliable in the skip tracing market. However, skip tracing can be counterproductive. Too much manual intervention and the mixing of service providers can be expensive in terms of dollars and man hours. I believe 99% of all skip tracing efforts need to be electronic and automated in the collection software. Agencies should work to streamline skip tracing efforts by simplifying or eliminating waterfall models in an effort to find one sound service provider that can satisfy all the service models previously mentioned. There are providers who offer batch, real-time, subscription, and manual skip tracing services. While the first three are electronic and integrated with collection software, the manual service is simply a portal where the service provider allows end users to manually search the database for new information or to maintain the customers monitored database. Working with a provider like this can greatly streamline an agency’s skip tracing process.
Regardless of your skip tracing practice, don’t overlook the information from the original creditor. It is usually the most reliable. You want that information, so ask for it in the placement file and load any data point you receive somewhere in your technology enterprise. If you don’t need it today, it will be easier to locate when you do need it tomorrow.
* This article is also published by Collection Advisor