Skip tracing is a high priority in any collections environment, and developing this skill set in your staff is absolutely critical. It will be even more imperative to have a retooled skip tracing strategy as new accounts flood the ARM industry in the midst of economic recovery.
With charge-off rates still near historic highs, creditors will be farming out more work to debt collectors and selling more accounts to buyers. As unemployment (hopefully) declines, the accounts will be much more liquid. Contacting the right party in the most efficient way possible will be imperative.
Statistics demonstrate that typically 40% to 60% of consumer accounts in a collection portfolio have no point of contact information for the consumer. Therefore, skip trace efforts are clearly a high priority. The failure to develop this skill set in your new hires can have a devastating effect on achieving production goals, and lengthen the time frame for a return on investment in new hires.
High turnover in the collection industry only compounds this situation. Add to that the necessity to bring on more collectors, and most ARM firms are going to be breaking in a lot of “newbies” over the remainder of 2010.
There is a new feature in LexisNexis® Accurint® for Collections to help locate consumers, with the secondary benefit of developing your staff into skilled skip tracers. This feature is called Skip Wizard, and it is a sequential process to more efficiently locate consumers.
The skip trace novice is first asked to input the consumer’s social security number and the current balance of the account being analyzed. The Skip Wizard will then utilize intelligent search functionality, analyze the data returned along with an evaluation of available relationship data, and determine the best possible course of action for the collector to follow. Skip Wizard will teach your collectors a logical step-by-step process for skip tracing while they work.
This is a solution that can fit any type of collection environment: first party, third party, and debt purchasers. It provides a standardized treatment strategy based upon demonstrated best practices on all accounts, to ensure compliance with requirements from the original creditor. The Skip Wizard can also provide collection organizations the ability to limit the scope of work performed based on account balances.
We expect an explosion of new hires in the ARM industry over the next few years. Developing and maintaining an efficient skip tracing procedure will be paramount, and we think we’ve created a tool to help the ARM industry do just that.
Mike Dozier is a Product Consultant responsible for developing solutions for the collections and recovery industry in the LexisNexis® Risk Management Group. Joining LexisNexis in 2007, Mike has been in the collection industry over 25 years, holding executive operations positions with some of the top collection agencies, collection law firms and debt buyers in the U.S.