Differentiating in the Commoditized Skip Tracing Market

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


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.


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