Between 2017-2020, PDCflow partnered with the California Association of Collectors (CAC) to share in-depth advice on running a successful, compliant debt collection agency.
The subjects, ranging from day-to-day operations such as best practices for telephone communications with consumers to high-level topics like creating debt collection settlement campaigns, first appeared as the curriculum of the CAC’s Collection Boot Camp courses.
Our collaboration with the boot camp panel (seasoned debt collection agency owners and the CAC MAP attorney) has allowed us to convert the material from these classes into a series of informative articles — like this detailed guide on skip tracing.
Learn from past CAC President Kelly Parsons-O’Brien, CAC MAP attorney June Coleman, and CAC members Shawn Suhr and Courtney Reynaud the best practices, available tools and legal considerations tied to locating current consumer contact information.
What is Skip Tracing? And Who is a Skip?
Parsons-O’Brien describes skip tracing as “the art and science of compiling information on missing consumers for the purpose of locating them and collecting overdue accounts.”
A few of the indications you have a “skip” — a missing consumer — are when a consumer’s mail is returned, their phone is disconnected, or when they have changed employers.
How to do SKIP TRACING work – DIFFERENT WAYS TO CLASSIFY A SKIP
Company Skips – These are caused by a clerical error when data is entered. If an address or other personal information is entered incorrectly, it can be difficult to locate individuals.
This can be minimized by scanning documents so they are easy to refer to later. Also be sure to train collectors to review documents thoroughly.
Unintentional Skips – This refers to individuals who leave the area without notifying creditors and agencies of a change in address. Because forwarding orders only stay on file for 90 days, a doctor bill or other statement may miss this deadline and not find its way to the correct consumer.
Intentional Skips – “These people are usually trying to run from something bigger than a debt collector,” says Parsons-O’Brien. “They’re trying to get away from their lives or their circumstances.”
These may be more difficult to locate than unintentional skips because they do not want to be found.
Skips With Criminal Intent – These are typically the people who are using multiple variations of social security numbers or other tactics specifically to evade paying creditors.
Vendor Selection for Skip Tracing Services
It can be difficult deciding which vendor to use for your skip tracing work. Here are a few tips for picking a skip tracing service that works for you.
- Free Trials – Skip tracing software vendors often offer free trials of their products. This is the best way to discover whether a product is right for your agency before you commit to spending the money.
When testing these products, try searching for information on yourself. This is a good way to be sure the addresses, phone numbers, and email addresses you’re getting from the system are accurate.
- References – Peer recommendations can be a great help in finding a good skip tracing system. This can help you choose the right product for your business. Not only this, but knowing what others pay for a system might provide leverage when you’re negotiating with a salesperson.
- Agency Needs – Do you need a product with unlimited searches? Is cost a big factor in making a decision? Think about how the tool will be used within your agency, and which types of accounts it will be used on.
If you will only use a product on large accounts, you may be able to afford something more costly if it provides more accurate or thorough information.
Some agencies don’t have the need or resources for a full-time employee to handle skip tracing. These products can fill the gap left by not having a dedicated skip tracing employee.
- Accurint
- Clear
- IDIData, Inc.
- TLO
- Work Number
Skip Tracing Websites and Other Skip Tracing Tools for Collections
Along with products specifically designed to help find people, there are other ways to find information on your skips for free.
Social media, other websites and government documents may provide helpful information at no cost.
Skip Tracing Work – What to Keep in Mind
Remember “Permissible Purpose” – Coleman urges collectors to keep “permissible purpose” in mind when skip tracing.
“Most of these services get their information from credit reports. If you are using a service that gets its information from credit reports, you have to have a permissible purpose.”
The Fair Credit Reporting Act sets forth various permissible purposes to obtain credit information. The relevant permissible purpose for collection agencies is normally a bill arising from a credit transaction.
If you do not have a permissible purpose, you cannot use a service that derives information from credit reports without violating the Fair Credit Reporting Act.
A few examples of types of bills that DO NOT arise from a credit transaction are:
- Towing
- Parking fines
- Governmental fines
- Any time a consumer did not ask for a product or service in exchange for payment
Understand Your Skip Tracing Service – If you are limited to non-credit report information because you do not have permissible purpose, Parsons-O’Brien says most skip tracing service vendors can provide reduced or non credit-reported information.
When you begin your relationship with your skip trace vendor, you will indicate whether you have a permissible purpose. This will limit or expand the sources of information, depending on how you answer the question.
To avoid violations, be sure you understand how your skip tracing software works and what you have communicated about permissible purpose. You don’t want to end up paying attorneys’ fees or damages for an inappropriate search.
Policies and Procedures – Check that your agency has up-to-date policies and procedures in your compliance management system on how to properly use your skip tracing tools.
Many of these skip tracing tools will deny your company access if there is an indication the systems are being abused. You may be flagged company-wide if one agent attempts, for example, to search for information on celebrities for their own amusement.
In cases of suspected abuse of these systems, your agency will be responsible for proof of appropriate action you have taken against the offending collector. An official reprimand or termination may be necessary to regain access.
Such abusive use of the skip tracing tools may also be a violation of law, and support a lawsuit against the agency.
To avoid this issue, require collectors to include each consumer’s account number along with searches, so there is accountability with the agent working each case.
Protect Your Employees – Beware of how you use social media platforms during searches. Parsons-O’Brien notes she is the sole user of Facebook during skip tracing at her company. This allows her to avoid exposing staff to inappropriate content that may appear on the timelines of those she is searching.
This also protects against an employee falsely impersonating someone to access Facebook content only viewable by friends. Convincing a debtor that the collector should be “friended” on Facebook could be an FDCPA violation.
Know Third-Party Verification Rules – Be cautious when you’re contacting a third party to verify location information. You can only contact them on one occasion, you must identify yourself by name, and you must disclose who you work for if asked.
The disclosure cannot reveal you are attempting to collect a debt and you should state you are confirming or correcting location information.
Does the Consumer Have an Attorney? – “If your consumer is represented by an attorney, you can only talk to the attorney,” says Coleman. “If this is the case with your consumer, you cannot call third parties and ask them information about location.”
Characteristics of a Perfect Skip Tracer
While skip tracing tools are helpful, having a human touch can be a great asset. What are the characteristics that make up a good skip tracer?
- Good telephone voice
- Skillful listener
- Ability to gain informant’s confidence
- Patience
- Tact
- Persuasive abilities
- Imagination/creativity
- Tenacity
- Integrity
- Determination, detachment and discipline
Successful skip tracers must have NO HESITATION. You may find the type of employee that makes a good skip tracer may not be successful at everyday account resolution.
- Look for briefly mentioned references to a person, place, hobby, or occupations. This could be your big break!
- Identify with dates: “Did you see them before Christmas?” or “Was it before or after Thanksgiving?” or “Did you see them/for their birthday in______?” People like to tell the truth. Help them.
- Ex-spouses or ex-girl/boyfriends are very good sources of information. Listen for background noises. Are they at work? Are they watching programs?
- Remember tone. “Thank you very much Joe, you gave me exactly the information I needed, have a great day.”
- Always announce who you are and what you want. For example, “This is Jayne and I am trying to get a hold of Sue Skip...”
- When your contact won’t share information until they know why you are calling or trying to reach the consumer, try “I am sorry but due to privacy laws I cannot give you that information.” Follow up with a question.
Training a Skip Tracer
Effective communication and listening skills are key. A good skip tracer will:
Use Active Listening Skills
Examples of active listening skills:
Paraphase -
Contact: “Jim’s not here anymore.”
Skiptracer: “He’s no longer employed by your company?”
Express Understanding -
Contact: “That jerk left without paying me last month’s rent.”
Skiptracer: “You sound like you’re mad at him.”
Ask Questions -
Contact: “I don’t know where Jim is.”
Skiptracer: “You mean you don’t know how to contact him?”
Ask Closed-Ended Questions
Examples of Close-Ended Questions:
1. “Does Sue Skip work at City Hospital?”
2. “Is there a phone number where I can reach her?”
3. “Does this happen in the fall or winter?”
Ask Open-Ended Questions
Examples of Open-Ended Questions:
1. “What else can you tell me that would help me locate Sue
Skip?”
2. “What is Sue Skip’s new address?”
3. “Who else could I talk to who may know where Sue Skip is
Located?”
Use Reflexive Listening and Ask Reflexive Questions
Examples of Reflexive Questions:
1. “Oh?”
2. “What happened then?”
3. “Are you saying…?”
4. “Yes?”
These tactics are helpful for learning more about your consumer. Remember, your only aim is to gain location information. These tactics are not allowed for any means other than verifying a person’s location.
Preventative Measures to Avoid Skip Tracing
Skip tracing is only necessary when you don’t have current information to locate a consumer. Fortunately, there are a few measures collection agencies can take to reduce how many accounts require skip tracing.
- Rely on creditors - Coordinate with creditor clients. Set the expectation that they should be collecting and maintaining current contact information. The better their records, the more money you can recover.
- Use email and SMS - When you use email and text channels to contact consumers, there is no need for a physical address.
- Use passthrough consent - Creditors that collect email and SMS opt-ins can pass the consent to your agency, making it faster and easier to reach out.
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- ABOUT THE AUTHOR -
Hannah Huerta, Marketing Specialist
Hannah Huerta is a Marketing Specialist at PDCflow. She creates content for the accounts receivable and payment industry.
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