I’m sure you’ve heard the expression “work smarter, not harder.” In today’s environment you need to do both to grow your business. Utilizing skip trace technology is a business-growth engine because it takes care of “easy” day-to-day activities like phone number identification and change of address, while at the same time working harder to solve overarching skip trace challenges like optimizing allocation of resources.
You want to stay relevant to your customers so that your business grows despite the jungle of compliance regulations that you wade through every day. That’s not easy to do because of the fast-paced, ever-changing and highly-competitive nature of today’s environment for the collections industry. Growing your business, while mitigating compliance risk is a top priority, and skip-tracing is an important element that can help. Below are nine best practices for effective skip-tracing efforts that you should begin implementing now.
1) Don’t De-Dupe: Instead of de-duping in your batch process, have your data provider flag and return duplicate data that still seems to be good. This way, you’ll remain focused on quality data and avoid getting bogged down by progressively worse data. By not de-duping, your business becomes more efficient.
2) Use Predictive Analytics: Optimize your use of predictive analytics. This can be done in two ways: first, by using contactability and recoverability scores to sort and prioritize your portfolios. With prioritized accounts, agencies can strategically assign resources, data spend and treatment approaches. Second, select a data provider that uses predictive analytics to select and rank data outputs. This more modern approach allows for you to make contact with the consumer sooner and with fewer failed attempts.
3) Monitor for Changes: One of the most underutilized technologies is monitoring for skip data changes. A recent monitoring study* on LexisNexis® phones found that in the first month of monitoring, there was a 10 percent lift in right-party contacts and that lift continued month-over-month. Enhance your batch processing with change alerts on all data types including phones and address.
4) Test Your Cell Phone Data Providers: It’s imperative for collections agencies to use technology to identify cell phones, but just as you test various phone number providers, you should also test cell identification providers. You’ll discover some providers are better than others, because this is not a commodity type product. Also, leverage a data provider that is using technology to identify real-time ownership of the cell number. Again, some providers are better than others, so you should test to make sure you’re protecting your agency from TCPA (Telephone Consumer Protection Act) violations, while maintaining the ability to contact consumers on cell numbers.
5) Identify Consumer Relationships: Contacting third parties is a critical part of skip-tracing, but before you call, make sure you know whom you are calling. You should work with a data provider that has the technology to be able to identify the relationship between the lead and the consumer you are skipping. Doing so will help mitigate FDCPA (Fair Debt Collection Practices Act) and UDAAP (Unfair, deceptive, or abusive acts and practices) risk, which come with very steep fines you will want to avoid so that you can reinvest those dollars into growing your business.
6) Don’t Ignore the FCRA: If you’re using data from an aggregator to make collection decisions, like payment plans or suit qualification, then the data must be FCRA (Fair Credit Reporting Act) regulated. For example, POE (place of employment) and POE phone data that are not FCRA regulated can only be used for contacting and locating the consumer. POE and POE phone data that are FCRA regulated can be used to make suit decisions. Be sure your data provider is protecting you from FCRA violations by providing you with data that is appropriate for your use case. Being ahead of the compliance curve by using FCRA data will help agencies win business with creditor clients. Creditors are more in-tune with compliance and the use of compliant vendors more than ever. Using a FCRA compliant data provider allows agencies to show their creditor clients that they have gone the extra mile to make sure they are using data correctly.
7) Update Content Versions: Innovative data providers constantly enhance their products. Make sure you have a process in place that keeps you up-to-date on their latest product versions and don’t forget to include regular product training for your users. You could have the best product on the market, but if no one knows how to use it or optimize it, then you’re missing a huge opportunity. Get your users on a regular training schedule. Training makes employees more productive and successful. And a successful collector is more inclined to be a loyal employee.
8) Have a Testing Plan: Grow your internal data testing competencies or outsource them to a firm who can help you get it right. Testing data quality is a complex process that is often over-simplified. Taking the time to test with rigor and integrity is critical to your collection success and bottom-line. Test results should dictate which data provider a company uses. The better the testing practices, the better the agency will be at making an accurate assessment. This decision will fuel the agencies business for months (until another test is performed), so a wrong decision about a data provider can lead to months of lost opportunity and unnecessary expense.
9) Validate Data Integration with Your Software Provider: Don’t assume your collection software provider is always up-to-date with integrating skip trace solutions. If you want the latest and greatest, then you may need to go directly to the data provider. Have your data provider explain any gaps in what’s integrated and what’s the best available, so you can make an informed decision. You may think you are getting the best that your data provider has to offer when in reality you are only getting the best of what has been programmed by your software provider.
These nine best practices enable you to do more with less, stay in compliance and stay current. When you have increased contact with the right consumers, you experience increased dollars collected and that equals business growth. By implementing these best practices, you’ll be able to lead the way in regulatory compliance by leveraging automated processes and analytics that allow human resources to focus on the challenging tasks.
*Study conducted in July of 2015.