Managing Unconventional Skip Tracing Data

The common skip trace practice many third-party agencies follow after loading a new placement file is to address skip trace, phone number skip trace, bankruptcy skip trace, deceased skip trace, and credit score. Most collection professionals are well versed on this now monotonous routine. All agencies do it. The difference lies in how the return data is evaluated, captured, and embedded into the daily workflow for managing the inventory. However, there are some other, unconventional skip tracing services and often, they will provide some very revealing information. This information may be just enough to separate you from the competition. I would like to detail three unconventional skip tracing services and more importantly, ideas for how to manage them in your receivables management software.

Possible Incarceration

You may eventually discover a consumer is incarcerated over the course of working the account but have you considered running a skip trace for incarceration before any effort goes into contacting the consumer or sending a letter? Executing this skip trace and identifying a consumer is incarcerated will allow your representatives to focus on accounts that are more collectible. The possible incarceration skip trace should be scheduled one of two ways. First, the request can be automated to run with your normal skip trace service requests (address, phone, bankruptcy, deceased, credit score). Alternatively, you have your regularly scheduled requests run first and then based on those results, segment the ideal consumers for a possible incarceration skip trace. For example, if you receive a return that a consumer is deceased or has a credit score less than 400, your automated workflow may be set up to automatically close the account. In those cases, your skip tracing automation should bypass that consumer altogether for the possible incarceration scrub.

When receiving a hit for incarceration, some decisions need to be made. Most often, a release date (if applicable) is provided with the incarceration hit. Depending on the duration of the incarceration, you may option to close the account and re-open it immediately after the release date. On the other hand, you may just want to close the account and archive it. Either way, let your system handle it with built-in automation.

Possible Litigious Debtor

The litigious debtor skip trace could save thousands of dollars in legal costs. This may be one of the most fascinating services available these days. A returned hit on this service may indicate you are facing a consumer who has filed one or several lawsuits against agencies. It exists because consumer lawsuits against agencies and first parties are on the rise. Furthermore, consumer initiated lawsuits are steadily increasing because more and more consumers are becoming well educated on the FDCPA and other federal or state regulation.

Unlike the possible incarceration skip trace, you may want to set up workflow to run the possible litigious debtor skip trace right away. If a hit is returned, most agencies establish rules in the software to immediately flag and close the account in an effort to eliminate any contact whatsoever. When going this route, utilize workflow or other automation to close the account, remove it from any dialing queues, stop any other skip tracing efforts, halt all contact attempts, and flag the consumer so it is understood to steer clear of this account.

Property

This skip tracing service is a fun one and can arm your representatives with some very valuable information prior to contacting the consumer. The property skip trace will inform you if the consumer has recently purchased, leased, or somehow acquired new property. A house, condo, and land are all property examples. This information is especially valuable when a representative is working a consumer who indicates they are on a tight budget or simply does not have the financial resources to repay the debt.

As for automating this service, it is best to send the request after your first blast of skip tracing. You will want to carefully segment and select the consumers you want for the property skip trace. Construct the workflow to select consumers with a valid phone number and address, populated with full SSN, an outstanding balance that justifies the property skip trace, and a moderate to high credit score. Unlike possible incarceration and litigious debtor, turning on monitoring is a great idea for this service. This will allow your skip trace provider to continuously seek property hits for the consumer, rather than a one-time scrub, and notify you when a new hit becomes available. With this information, a representative can easily counter an excuse-ridden consumer by simply questioning his financial position since he has recently purchased a new property.

Before jumping right into unconventional skip tracing, you must first develop guidelines for isolating and marking the consumers for these different services, for identifying them when hits are received, and for the special handling they require. Regardless of the decisions for implementing unconventional skip tracing or managing the returns, store the data in your software or data warehouse and make the process automated in your software by including it in your everyday workflow.

* This article is also published by Collection Advisor

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4 Compliance Areas Debt Buyers Must Address

For years, debt buyers could operate outside the scope of compliance and regulation in the accounts receivable management industry. This was not because debt buyers were attempting to be deceitful, rather this sector of the industry was so new and innovative that too much was unknown to attempt to govern it. Those days are over and no longer are debt buyers overlooked. In fact, they are now very much on the radar of the CFPB. It was only a matter of time as compliance administration was on the rise with larger creditors and other first parties. The CFPB is already visiting the organizations. Most would agree that debt buyers are not far down the list.

What can debt buyers do to prepare themselves for a call from the CFPB? Debt buyer certification programs are fairly new in the industry and several options are available. The standards for most of these certification programs focus on the primary areas of concern debt buyers are facing these days. Topics including media, chain of title, agency management, and credit bureau reporting all make the cut. I would like to examine these four primary topic areas and present some solutions for capturing and maintaining the compliance related information using the same technology debt buyers are using to manage their inventory. Let’s set the precedence that present day debt buyers are managing their inventory with proper, enterprise level software. Any debt purchasing operation still managing inventory using spreadsheets is destined for compliance violations and trouble with the CFPB should there be an audit.

Media

Also referred to as account and debtor documentation, media is crucial for debt buyers and it is important to have software that will allow for media attachments on a per account basis. Often, media is not included in the actual purchase agreement. It usually must be requested from a separate entity, or if the seller does have the media, it comes with an additional cost. In many systems, media attachment components are not included but hopefully your software allows for custom configuration and you are able to add media attachment options.

Make sure media attachments are available at both the account and consumer levels. For example, there may be a contract at the account level but separate credit reports if there is more than one responsible party on the account. The setup should be able to store the credit report for the respective responsible party. Most media is large in file size and because of this, disk space will be consumed quickly. Proper system sizing is often overlooked and needs to be planned accordingly. Lastly, in the event a consumer pursues litigation, the debt buyer will need to be in a position to confirm the consumer opened the account and is a responsible party by presenting media.

Chain of Title

The history of account ownership is referred to as chain of title. When a debt buyer purchases an account from a creditor or another debt buyer, the ownership is transferred. Like media, chain of title is additional documentation for the account. It should be requested at the time of purchase and any information or media related to chain of title should be stored in the software at the account level. You will want to have this information for compliance purposes, in the event of litigation, or if you eventually sell the account. Storing the chain of title in your software will also position you to set up your placement strategies with external agencies and provide them with chain of title for each account in the placement file.

Agency Management

As a debt buyer, knowing the agencies you are placing with is almost as important as knowing your own agency. At least that is what an auditing entity will expect. Until sold and ownership changes hands, debt buyers are responsible for all their accounts regardless if being worked inhouse or placed with an external agency. There is some very nice software available for debt buyers that will not only allow for automated account placement strategies, but will also include features for ranking an agency, certifying an agency, and tracking compliance related data points for an agency. If you cannot find the latter in your current software, it is in your interest to build out the agency management module to capture compliance related information. For example, you may be expected to know any certifications your agencies have achieved, how they enforce and maintain data security related to your inventory, and their backup and restore procedures. In most cases, this is not only a single field of data. You should be able to capture and store short text descriptions of the processes or attach documentation to the external agencies that are configured in your software.

Credit Bureau Reporting

How debt buyers report to the credit bureaus is one of the most common violations in the industry. Far too often, workflow elements for credit bureau reporting is not detailed enough. Ensure your credit bureau reporting workflow is not re-reporting debtors and is also deleting debtors from the bureau’ s file upon resolution of the debt or in the case of bankruptcy. Be ready with documentation that details your process. It is much easier to hand an auditor a detailed document and walk through it together than attempt to explain your process for others to appraise. Credit bureau reporting practices are also key processes debt buyers should understand about each of their external agencies.

Understanding and documenting compliance standards such as those described above will help prepare you for a visit from the CFPB. At the very least, you will have addressed and standardized some important, compliance related business processes should the CFPB never call or visit.

* This article is also published by Collection Advisor

Launching Your Data Warehouse for Skip Tracing

The production data you receive can be simply classified into two categories. It is good data or it is bad data. We refer to the bad data as “garbage data” because it breaks your automated processes, will not load into your software, and in most cases requires some agonizing manual intervention. However, it is important to intelligently collect all skip tracing data and build automated processes for managing it. Technology solutions should be in place to manage your skip tracing data and to avoid your agency being buried in a landfill of skip tracing data.

Although, most collection software includes some sort of inherent module, feature, or perhaps even integrations for interfacing with skip trace service providers, a data warehouse should be implemented as a paired solution for housing and evaluating your skip tracing data. Your agency may already have a data warehouse that can be enhanced to include skip tracing data. Here are some considerations when launching or enhancing a data warehouse for your skip tracing data.

Basic Considerations

The basic, or not-that-exciting, considerations include:
1) Location – You need a server. If your security, compliance, and client requirements do not force you to host the data in-house, I recommend outsourcing to a hosting company. Most hosting companies can dedicate a physical server in a secure environment or implement a virtual environment with the same levels of safety and security.

2) System Sizing – Aside from the other data structures in your warehouse, how much disk space or how much processing power will you need to account for your skip tracing data? The disk space should be enough to house the production data from all systems feeding the data warehouse and from all the ancillary sources, such as your skip trace vendors. Regarding performance, there should be enough muscle to execute all jobs, rules, and interfaces in enough time to not interfere with any regu lar backups. If utilizing a hosting company, they can help you figure this out.

3) Software and Licensing – For most agencies, Microsoft Windows Server and Microsoft SQL Server will do the job. You may require .NET framework, Java, or special drivers based on your preferred technology for interfacing with the data warehouse. This is another area your hosting company can assist with.

Complex Considerations

The complex, and more stimulating, considerations include:
1) Data Structure – All skip tracing data should be captured and stored in your data warehouse even if it is not utilized today. After all, you are paying for it. It is safer to have the data and not need it than to need the data and not have it readily available. Try to construct an intuitive data structure. This will make future build out and scalability much easier.

2) Business Rules – There are many considerations on this topic but let’s focus on the skip tracing data your agency deems important. If you do not have documented business rules stating which pieces of returned data are imperative and how that data is used, you should. Let’s look at a simple business rule example. Most agencies run a skip for phone and address. Of course this information is imperative but how are you handling this returned data? Is it accepted as the best and always overwrites the primary phone and address in your system? Are you running a process to validate the returned phone and address prior to overwriting data in your system? Are you handling the returned data differently based on the source? These are some of the questions your documented business rules should answer. Finally, program these rules into your data warehouse so the process is fully automated.

3) Data Analytics – Many agencies overlook the importance of data analytics and thus lack the understanding of data trends. If you are going through the process of implementing or enhancing your data warehouse to include skip tracing data, you should absolutely run systemic analysis to understand your skip tracing data. This is more than identifying which skip tracing data points are important. Rather, it will show you what the data means. With proper build out, you will understand where you are getting the best skip trace results, what is not working within your business rules, and will likely identify cost saving opportunities.

* This article is also published by Collection Advisor

Emerging IT Trends – The Age of Data

Big Data is Big Business
Big Data is Big Business

These are truly exciting times! The volume and velocity of data available to every business is astounding and continues to grow. IT industry leaders are talking about where technology is going, what the future holds and the impact all of this will have on the world.

Robin Bloor took a minute to review the path to the present, in his guest post “The Age of Data”, on the Actian blog this week, before revealing the vision he and IT Industry thought leader, Mike Hoskins have of the future for data.

“Mike Hoskins, CTO of Actian (formally, Pervasive Software) suggested to me in a recent conversation that we have entered the Age of Data. Is this the case? ” Bloor begins his post with a review of history. “The dawn of the IT industry could certainly be described as the Age of Iron. Even in the mainframe days there were many hardware companies.” I agree. In the past, the focus was on the machines and what they could do for humans.

Bloor continues, “Despite the fact that computers are only useful if you have applications, the money was made primarily from selling hardware, and the large and growing companies in that Age of Iron made money from the machines.” You can guess the monicker Bloor gives the next phase of IT history: “The Age of Software”. The volume of databases and applications available for organizations to buy exploded. And that got messy. Lots and lots of file types, formats, languages, programs led to multiple versions of records and interoperability nightmares.

What’s next? Bloor suggests it’s the Age of Data. It’s about the data and the analytics it can provide us. This is the Cambrian explosion that will be one of the primary topics discussed at the Big Data & Integration Summit NYC 2013. Actian Chief Technologist, Jim Falgout and I will present our views on emerging trends and lead a roundtable discussion with other industry leaders about the impact all of this will all have on business. I invite you to join what promises to be a lively conversation and attend the Summit.

Based on feedback from  industry leaders and customers, the Emprise Technologies and Actian teams have created a handful of sessions designed to deliver best practices that IT professionals can take home and use immediately to improve IT project success. These include “How to Win Business Buy-in for IT Projects”, “Avoiding the Pitfalls of Data Quality” and “Creating Workflows That Ensure Project Success”. I hope you’ll come join us. If you can’t make to New York, we’re planning to take the Big Data & Integration Summit on the road, so leave us your requested cities and topics in the comments below. We look forward to hearing from you.

The Data Flow Architecture Two-Step

Robin Bloor's Data Two Step
The Two Step Data Process

In his latest post on the Actian corporation hosted Data Integration blog, data management industry analystRobin Bloor laid out his vision of data flow architecture. He wrote, “We organize software within networks of computers to run applications (i.e., provide capability) for the benefit of users and the organization as a whole. Exactly how we do this is determined by the workloads and the service levels we try to meet. Different applications have different workloads. This whole activity is complicated by the fact that, nowadays, most of these applications pass information or even commands to each other. For that reason, even though the computer hardware needed for most applications is not particularly expensive, we cannot build applications within silos in the way that we once did. It’s now about networks and grids of computers.”

Bloor said, “The natural outcome of successfully analyzing a collection of event data is the discovery of actionable knowledge.” He went on to say, “Data analysis is thus a two-step activity. The first step is knowledge discovery, which involves iterative analysis on mountains of data to discover useful knowledge. The second step is knowledge implementation, which may also involve on-going analytical activity on critical data but also involves the implementation of the knowledge.” Read more->

How to Win “CIO of the Year Award”

CIO Award
Winner of the CIO of the Year Award

Do more, with fewer resources and do it faster.

Almost every CIO I talk with tells me that they face these challenges. They also tell me that dealing with the ever changing compliance requirements adds another layer of difficulty to their jobs. So, what exactly does an IT executive do to tackle these issues to win CIO of the year?

To find out, let’s take a look at the 2013 Denver Business Journal CIO of the year award winner William A. Weeks, CIO SquareTwo Financial. InsideArm published an article about Weeks’ award on July 2, 2013. What did he do so well?

“Bill completely repositioned our IT department as a business differentiator, and increased our technology capabilities so we can lead our industry in data reliability, availability, analysis, decisioning, security and regulatory compliance,” said Paul A. Larkins, president and CEO of SquareTwo Financial.

Selected for the midmarket category of companies with $50 million to $500 million in annual revenue, Weeks stood out for:

  • Transforming an IT department and plugging IT into the business
  • Re-engineering and stabilizing legacy systems
  • Reducing costs
  • Delivering numerous automation benefits
  • Raising the industry bar on data security and collection industry regulatory compliance

Specifically, what Weeks did to accomplish these goals was to improve data quality, increase data and application integration, while improving security and compliance requirements. And at the top of the list is that he “plugged IT into the business”. He aligned the IT group with the business and improved the quality and access of the data assets that the business needs in order to perform more efficiently.  That, I believe,  is the secret recipe for an award winning CIO.