Debt collection becomes slow and complicated when the borrower can't be reached through their usual contact details. This problem is solved through skip tracing. Skip tracers locate debtors by checking their details, searching public records, and speaking with people who might know them.

According to Forbes, skip tracing is a big part of the expertise of many collection agencies. Skip tracing is a way to find people who owe money but are hard to reach. It happens when someone changes their address or phone number or avoids contact to escape paying a debt. Here’s how skip tracing supports debt collection:

• Finds People Who Have Moved - Skip tracing locates new addresses or phone numbers for debtors who have relocated.

• Reaches Unresponsive Debtors - For those who avoid contact, skip tracing uses tools like updated phone numbers, emails, or even social media to reestablish communication.

• Identifying Assets - Skip tracing uncovers details about a debtor’s employment, bank accounts, or property, which helps garnish wages or place liens on assets.

• Taking Legal Action - Accurate information from skip tracing helps serve court notices, file lawsuits, or issue wage garnishments.

• Minimizing Losses for Creditors - Skip tracing locate debtors and recover unpaid funds. It also reduces the likelihood of financial losses.

Tools and Techniques Used in Skip Tracing

Skip tracing uses a range of tools & techniques to track debtors that are difficult to locate.

1. Public Records and Databases

Public records and databases are the backbone of most skip tracing investigations. Here are the types of public records used in skip tracing:

• Court and Legal Records - Skip tracers look at local court records to find information about the debtor. These records might show if the person was involved in a lawsuit, charged with a crime, went through a divorce, or dealt with probate. The records have valid details like new addresses, job information, or other clues about the debtor.

• Property Records - County property records and real estate transactions help find the debtor's current or past addresses. These records show who owns a property, the address, and sometimes other details like taxes or liens. This information can give clues about where the debtor lives or how they manage their money.

• Voter Registration Records - Public voter registration records show where someone is registered to vote, which can help find their current address. People usually update their voter registration when they move, which can be helpful.

• Professional Licensing Databases - If someone has a professional license, like a doctor, lawyer, or real estate agent, their licensing records can show their address and work details.

• Driving Records and DMV Databases - The Department of Motor Vehicles (DMV) keeps updated contact details such as address changes, vehicle registrations, and driver’s license information. These records help track debtors who own cars or regularly deal with transportation authorities.

• Business Records - If the person owns a business, skip tracers can check business registration or corporate filings. These records show the business address and recent activities.

2. Social Media Platforms

People often share updates about their location, activities, family, and work on social media, which can provide essential clues about them. Here are key social media platforms for skip tracing:

• LinkedIn - LinkedIn is a professional platform that provides information about a debtor's work history, current employer, and location. It also shows their connections, which can help track their location or what they’re up to.

• Facebook - Skip tracers use Facebook to find personal information such as current addresses, recent check-ins, job history, family members, and even posts or comments. It helps reveal the location of the debtor.

• Instagram - Skip tracers use Instagram by searching a debtor’s profile. They also find out recent places they’ve visited, where they live, or even their workplace.

• Twitter - Twitter offers real-time updates about what someone is doing or where they are. Using hashtags, location tags, and check-ins can provide valuable clues about a person’s location or daily activities.

• Other Platforms - Depending on the debtor, social platforms like TikTok, Snapchat, YouTube, or even Pinterest can also offer helpful information about their activities, location, and social connections.

For instance, when people tag their location in social media posts or check in at certain places, it can give clues about where they are. If someone says they're struggling financially but posts pictures from an expensive vacation, it can raise concerns and help assess the risk of their situation. However, according to FDCPA, debt collectors can’t privately message debtors on social media if they ask them to stop.

3. Utility Records and Credit Reports

Skip tracers can turn to utility records and credit reports to learn more about a person's recent activities. These records often provide current contact details and hints about the person’s financial situation.

• Utility Records - Utility records can offer important information about where someone lives. These records include details about services like electricity, water, gas, or even cable subscriptions, all connected to a debtor's home address.

• Water, Electric, and Gas Bills - If the debtor has recently moved, their name might appear for a new address in utility records. Utility companies may also have updated contact information for billing.

• Telephone and Internet Service Providers - Phone and Internet service providers can offer information about new services, billing addresses, and account activities, which reveals where a person lives.

• Credit Reports - Credit reports show the most recent addresses linked to a person’s credit activities. They may also include the names of current and past employers.

4. Data Mining with Advanced Software and Databases

The debt collection industry's most advanced skip tracing techniques leverage sophisticated data mining tools, specialized software, and commercial databases to create a comprehensive debtor profile. These tools gather and process various information, including public records, social media activity, utility bills, credit reports, and even transaction histories, to locate hard-to-find debtors.

For instance, AI-driven tools can cross-check public records with social media profiles to verify a debtor's current location or employment status. If a debtor listed a specific address on a recent loan application and posted about relocating to a new city on social media, the system can prioritize the new location for further investigation.

Machine learning enhances skip tracing by identifying patterns and learning from prior cases. For example, if a certain demographic frequently relocates within specific neighborhoods or zip codes, the system can focus its search on those areas, reducing wasted time and resources.

Predictive modeling takes this further by using historical data to forecast future movements. For instance, if a debtor has a history of moving within a specific state due to seasonal employment, the system can preemptively prioritize searches in those regions during relevant times of the year.

Additionally, advanced data mining tools address common challenges like outdated contact information, name changes after marriage or divorce, or misspellings in official records.

How this agency achieved 4X ROI with AI for compliance

How a leading agency streamlined its QA team and boosted compliance while reducing headcount.

Read now

How Skip Tracing Works?

Skip tracing involves thorough investigation using technology, databases, and human insight to locate individuals and update their contact details. Here’s how scrip tracing works:

Step 1. Gather the Initial Information

First and foremost, skip tracers collect the debtor’s basic details, including their name, last known address, phone number, social security number, and employment history.

In addition, they examine the debtor’s address history to identify recent moves or patterns. Skip tracers look for multiple addresses of the debtor used over the years. They also check past messages, like emails, phone calls, or letters, to find clues about the debtor.

Step 2. Search Public Records and Private Databases

Skip tracers use public records, such as court filings, and private databases to gather legal and personal details about the debtor. Specialized databases also collect data from credit bureaus to provide the most current information. For instance, recent credit card or loan applications may suggest an address change or financial restructuring.

Additionally, utility records, phone bills, online directories, and internet service contacts offer up-to-date contact information tied to physical addresses.

Billy Howard, a Florida attorney and leader of the consumer protection division at Morgan & Morgan, describes social media as "a dangerous weapon." Certain debt collectors exploit social media to harass individuals intentionally. So, ensure your social media practices don’t harass debtors, and you use them wisely.

Step 3. Utilize Interviews and Connections with Family & Friends

Skip tracers may contact personal connections and conduct interviews to gather more details about the debtor's location. They may contact people close to the debtor, such as family members, friends, or colleagues. Skip tracers might also contact neighbors, coworkers, or other associates for more information.

Additionally, they may explore community connections, such as local clubs, churches, or organizations, to find leads. If these methods don’t work, skip tracers may conduct surveillance or field investigations by visiting places the debtor is known to go.

Skip tracers use digital records and human analysis to build a complete and accurate debtor profile. However, they must comply with the laws to ensure they collect information legally.

Legal Considerations in Skip Tracing

Skip tracing must be carried out in compliance with laws and regulations. Misusing skip tracing techniques can lead to legal problems, including fines, lawsuits, and harm to one's reputation.

Given below are the key legal considerations professionals must follow when conducting skip tracing.

Compliance with Privacy Laws and Regulations

Skip tracers must comply with the privacy laws that protect personal data. These laws regulate how information can be accessed, used, and shared during skip tracing.

• The Fair Credit Reporting Act (FCRA) - FCRA law regulates how credit information can be accessed and used. Skip tracers must have a permissible purpose, such as debt collection, before obtaining credit reports. Unauthorized use can result in severe penalties.

• The Right to Financial Privacy Act (RFPA) - The RFPA act protects individuals' financial records from being disclosed without proper consent. Skip tracers must avoid accessing financial records without the individual's consent or a valid legal reason.

• The Gramm-Leach-Bliley Act (GLBA) - The GLBA law controls how financial institutions manage personal financial information. Skip tracers must avoid improperly accessing or using private financial data without permission.

Additionally, they must follow privacy laws by using only legal databases, public records, and tools for debt collection. They should not access private or confidential information without permission or legal approval.

Adhering to Debt Collection Practices and Avoiding Harassment

Debt collectors must follow strict rules to avoid harassment or breaking consumer protection laws. Here are the key regulations governing debt collection:

• Fair Debt Collection Practices Act (FDCPA) - FDCPA bans abusive practices like calling at inconvenient times, using threats, or making repeated calls. Skip tracing must not lead to harassment.

• State Laws on Debt Collection - Many states have extra rules for debt collection, including stricter limits on how skip tracing can be used. They also have rules for contacting third parties, like family or employers. So, debt collectors should check those rules.

• Time and Frequency Restrictions - Debt collectors shouldn’t call too often or at inappropriate times, like early mornings, late at night, or during holidays. These rules aim to protect debtors from unnecessary stress.

• Cease and Desist Orders - If a debtor requests in writing that a collector stop contacting them, the collector must comply. Skip tracing cannot be used to ignore such requests, and further communication is only possible in legal proceedings.

Debt collectors must follow the FDCPA and local laws when using skip tracing. They shouldn’t use harassment or cross boundaries when contacting third parties for information. Communication should be respectful, and the goal should be to locate the debtor without violating their rights.

Understanding Consent Requirements for Tracing

In many cases, skip tracers need permission to access certain personal information. It could include financial records, phone data, or other private details. Here are the consent requirements for skip tracing -

• Telemarketing and Phone Consent - Skip tracers may need to call people or their contacts for information. The TCPA requires consent, especially for calls using automated or pre-recorded messages. Skip tracers must ensure they have permission before making these calls.

• Informed Consent in Interviews - When talking to someone’s friends, family, or neighbors, skip tracers must be clear about why they’re asking questions. People should know the purpose of the conversation and how their answers will be used.

• Third-Party Data Sharing - If skip tracers rely on other companies or databases for information, those services must comply with consent and data protection laws.

In addition, be careful when using social media for skip tracing. Joel Winston states that they have found a few complaints about debt collectors who are using social media. These collectors either impersonate the person's friends or use it for harassment, violating FDCPA guidelines. In fact, trying to get a debtor to “friend” you on Facebook might also violate the law.

Batch Skip Tracing

Batch skip tracing is a method to find contact information for multiple people simultaneously. It processes a list of names, addresses, phone numbers, or other details to gather updated information for everyone in the group. This data is then uploaded into a skip tracing system that specializes in batch searches.

Most batch skip tracing services provide a web-based platform where users can easily upload a file for processing. After uploading, users can choose how deep they want the search. For example, a basic search looks for updated addresses or phone numbers, while an advanced search digs deeper, finding social media profiles, criminal records, and employment history.

Once the batch query is submitted, the skip tracing software searches a large network of databases to find the most current information. It uses advanced data mining algorithms to gather data from multiple sources. The system uses sources like public records, credit reports, and utility bills to find the most current contact information.

As the software collects data, it undergoes an enrichment process to improve and verify the accuracy of the information. After the data mining, the system produces the final results, usually in a downloadable report format like CSV, Excel, or PDF.

Conclusion

The success of skip tracing in debt collection depends on using the right tools and methods. From public records and credit reports to advanced data analysis and social media searches, each resource helps find hard-to-reach debtors. By combining traditional techniques with new technology, debt collectors can improve their chances of success.

Skip tracers should ensure the contact information is correct by checking it with other sources. Remember to use skip tracing services that offer more reliable data or better sources. In addition, contact the person directly, either by calling or emailing, to confirm the details.

How do you get more payments with personalization? Check now!

FAQs (Frequently Asked Questions)

1. What is tracing a debtor?

Debtor tracing finds people who owe money but have moved to a new location. It includes searching through public records, financial documents, social media, and other sources to find the debtor's information. Skip tracers discover the current address, contact information, or whereabouts to collect the owed debt.

2. What is the best way to skip trace?

Traditional skip tracing methods rely on public records, interviews, and field visits. In addition, public records like courthouse documents, property deeds, marriage licenses, and birth certificates help track down hard-to-find individuals.

3. What is debt dumping?

When a company struggles to collect a debt, it may transfer to a related company in another country with a higher tax rate. Debt dumping allows the company to write off the debt in that country, which can help reduce its overall tax burden.