Debt among American citizens is rising every year. According to a Debt.org article, American household debt hit a record high of $16.9 trillion in 2022, a $2.75 trillion rise from the previous high in 2019. Additionally, Americans owe $986 billion on credit cards. Thus, it is no surprise that many people miss payment deadlines of 30 days or more.
Skip tracing is a critical process in debt collection that helps collect payment from those trying to avoid payment. It involves searching for individuals who have defaulted on their financial obligations and seemingly disappeared.
Collection agencies rely on various data sources and sophisticated techniques to locate these individuals. This article explores the types of data collection agencies use for effective skip tracing, emphasizing the importance of each data type.
Personally Identifiable Information (PII)
The foundation of skip tracing is built on Personally Identifiable Information (PII). This includes basic details such as full name, date of birth, Social Security number, and last known address. Collection agencies start their search with this fundamental information, often available from the original creditor or initial account setup details.
PII provides a starting point that helps narrow the search to specific individuals. For instance, knowing the exact date of birth can help differentiate between individuals with similar names. Social Security numbers are particularly useful as they are unique to each individual, ensuring the correct person is being traced.
As stated by the Consumer Financial Protection Bureau, debt collectors may take personal information directly from debtors. They may ask for their name, date of birth, and the last four digits of their social security number, among other things. A skip tracer may use this information to track the debtors.
Credit Reports
Credit reports are a goldmine of information for skip tracers. These reports contain comprehensive details about an individual’s financial activities, including credit card accounts, loan histories, and payment behaviors. One of the most significant reasons to use credit reports is that they list the addresses associated with the person over time.
Knowing the most recent address of a debtor can help find the current one during a skip trace search. For instance, by knowing the most recent address, you can request address forwarding information from the postal service. If the debtor has filed a forwarding request, you can be referred to the current address.
However, knowing the most recent addresses alone can benefit skip tracers. According to the Debtor Inspector, previous addresses can be used to apply for a loan, fill in rental information, make public record searches, etc. Thus, whether you get the current address or not, previous details can still bring you one step closer to the debtor.
Public Records
Public documents are another useful tool for skip tracking. These documents include property records, court records, marriage and divorce records, voter registrations, and even company licenses. Public records can reveal significant changes or events affecting a person’s location.
For example, property records can show if the individual has recently purchased or sold a home, providing a new address. Marriage or divorce records might indicate a name change or a shift in living arrangements. Court records, including bankruptcy filings, can also give insights into financial difficulties or legal proceedings that might influence the debtor’s location.
However, a Reuters article mentions that skip tracers should not rely on Google for public record searches. One of the biggest advantages of Google is that it offers personalized results based on a user’s search history. However, this benefit becomes disadvantageous to skip tracers. Skip tracers would not want to get different search results for the same person they are looking for.
Government Databases
Various government databases provide additional layers of information. Agencies may access databases related to Social Security, motor vehicle registrations, and more. These databases are typically accurate and up-to-date, offering reliable information about an individual’s identity and location.
Motor vehicle registrations, for example, can reveal current addresses linked to driver’s licenses or vehicle registrations. Similarly, Social Security records can confirm identity details and current status, such as employment with federal agencies or retirement.
Social Media and Online Presence
In the digital era, social media platforms and online activities provide valuable information for skip tracing. More than five billion individuals globally used social media in 2024, expected to rise to more than six billion by 2028.
A Gallup survey shows that the intent to browse social media is more prevalent than posting. Only about 35% of Americans post content on Facebook, and 20% do so on Instagram. However, these platforms can still be valuable for skip tracers looking to track down faulty debtors.
People frequently post details about their lives on networks such as Facebook, Twitter, LinkedIn, and Instagram. Collection agencies can monitor these platforms to gather clues about the debtor’s location and activities.
For example, a post about moving to a new city or a job update on LinkedIn can all provide valuable leads. Additionally, social media can reveal connections to friends and family who might know the debtor’s whereabouts.
Frequently Asked Questions
What does skip tracing mean in the context of debt collection?
Collection firms employ skip tracers to discover individuals who have defaulted on their obligations and are difficult to trace. The term “skip” refers to the debtor, while “tracing” refers to the process of finding them.
How can credit reports aid with skip tracing?
Credit reports provide detailed information on a debtor’s financial activity, such as credit accounts, payment history, and current and past residences. This data can assist collection agencies in detecting patterns and likely debtor locations.
What function do public records have in skip tracing?
Public data, such as property records, court documents, and voter registrations, can provide important information about a debtor’s present location, address, and financial situation. These records are frequently accessible online or at government offices.
To conclude, effective skip tracing is a complex process that relies on many data sources. Skip tracers can significantly increase their chances of locating debtors by leveraging the above data points.
Each data type plays a crucial role in painting a comprehensive picture of the debtor’s current situation and likely whereabouts. The integration of these diverse data points, combined with analytical tools and professional expertise, enables collection agencies to trace defaulted individuals.
