Monday, June 6, 2016

Skip Tracing: What Every Collection Agency Needs to Know

These days, there are many tools available to help collection agencies and business owners garner information and find consumers who are hard to reach or who may even purposefully be dodging them. However, despite the many technologies and resources available in today’s world, debt collectors are somewhat limited in terms of how much they can do because they must always operate within the bounds of the law and with the Fair Debt Collection Practices Act and its specifications in mind.   

For example, even though debt collectors could easily use the internet to determine the closest friends and/or relative of a debtor and then contact that person for information on the debtor’s whereabouts, there are limiting laws in place, such as one that says debt collectors can only communicate with third parties with the intent of collecting location information one time!

Debt collectors can, of course, resort to “sneaky” tactics, like garnering information from other companies, checking with the county tax assessor, and looking up utility records. However, these types of practices take a lot of time and money, both of which most modern businesses and collection agencies can’t afford to waste. Fortunately, though, there is an easier way.

There are many companies that offer skip tracing services for a nominal fee and that will do all the hard work of chasing down “disappeared” clients. Before using a skip tracing service, however, there are things to consider and questions to ask.

Compliance Counts
First of all, it is imperative that any skip tracing service is fully compliant with all state and federal regulations. This means that companies should only work with licensed, insured skip tracing services that have a track record of compliance when it comes to skip tracing.

Smart businesses may even want to have their skip tracing services sign compliance contracts, guaranteeing to maintain compliance, before entering into business with them. That might sound extreme, but businesses these days can never be too careful when it comes to protecting themselves from litigation due to non-compliance.

Consider the Cost
Once businesses are sure that they can maintain their integrity and avoid litigation when working with a particular service, they’ll want to think about more practical matters, such as how much the skip tracing service will cost, and whether or not the cost is worth the return.

There is no way to fully predict how effective a skip tracing service will be, but businesses can inquire about the success rate of services they are interested in and determine, from there, whether or not they think a skip tracing service is a worthwhile investment.

If businesses do try out skip tracing, they should keep careful track of how much money the service garners them in income versus how much they spent on it, and, if things don’t balance out, then they may want to rethink using skip tracing services or to at least find another service.

Professional, out-of-house skip tracing isn’t for every business, but each business should at least consider it and whether or not it’s the right fit.

No comments:

Post a Comment