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| #1: Efficiency and speed |
| #2: Enhanced success rates |
| #3: Cost-effectiveness |
| Value of enhanced skip tracing |
One of the biggest ongoing frustrations many businesses and public agencies face is collecting on a past-due account. Whether it involves a medical bill, a credit card payment, child support from a noncustodial parent, or some other form of debt, finding people who don’t want to be found represents one of the most complex and costly set of challenges that these organizations are forced to manage.
There are two ways that they can pursue debtors. The traditional method is manual search, which requires staffers to look through data, make phone calls, and engage in investigative legwork in limiting sources. The other is enhanced skip tracing, which uses technology to quickly and accurately pinpoint a person’s whereabouts. These two methods have many similarities—and numerous key differences. In an increasingly digital world, dedicated skip tracing solutions can provide faster, more accurate results, as well as measurable ROI.
Benefit #1: Efficiency and speed
One similarity between traditional, manual search and modern, enhanced skip tracing: Both must comply with legal regulations regarding privacy and fair debt collection practices. And of course, both methods rely on data, with personal identifiers like names, addresses, phone numbers, and Social Security numbers as starting points. From there, both can utilize public records such as real estate data, court documents, and licensing information to track down a debtor.
These are no longer the only data sources available. Thanks to the widespread use of computers, cellphones, and closed-circuit cameras, there is no lack of location data for most individuals. Even social media can uncover important clues for skip tracers (as long as the debtor’s social media information has not been deleted or set to private).
That’s the good news. The bad news is that sifting through mountains of data takes up more time and resources than many organizations can afford.
It’s the data-gathering aspect that reveals the most substantial differences between manual and enhanced skip tracing. The chart below offers a side-by-side comparison of the distinctions:
Traditional
- Relies primarily on public records and direct inquiries
- Processes information sequentially
- Limited to publicly accessible information
- Often involves direct contact with potential information sources
- Requires interpersonal skills for phone calls and in-person visits
Enhanced
- Utilizes specialized software and databases
- Can process multiple data points simultaneously with batching
- Can access proprietary data sources that typically aren’t readily available to the public
- Involves less personal interaction
- Requires technical skills to use tools effectively
These differences are crucial. Compared to the traditional method, enhanced skip tracing can improve debt collection efficiency and speed. Again, data is the key. The quality of the information impacts the success rates of both approaches. Enhanced skip tracing can unlock critical location information from top-tier data sources such as credit bureaus and bank records. This directly contrasts with manual searches, which are unable to readily tap these proprietary databases. In addition, batch skip tracing tools can analyze multiple databases simultaneously, providing results in minutes that might take manual methods days or even weeks.
Benefit #2: Enhanced success rates
Thanks to capabilities like these, enhanced skip tracing can improve organizations’ workflow efficiency and more quickly find the people who are in arrears. Faster case resolution, in turn, boosts debt collection success rates.
Overview: Skip tracing
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Read the in-depth blog ↗There are several ways that this success can be measured. Key performance indicators (KPIs) for collections include the debtor contact rate and the percentage of outbound calls resulting in the promise to pay. These are useful metrics for measuring the effectiveness of the manual search process conducted by phone. But because enhanced skip tracing isn’t “built upon” time-consuming phone contact, it can speed up the investigation process. Its success is measured by other means.
For instance, there’s the collector effective index, a KPI which measures the amount of past-due money collected against the total receivables during a specific period of time. Another essential collections KPI is profit per account (PPA), which determines how much each account impacts the bottom line. This metric is calculated by dividing an organization’s gross revenue or income over a specific period of time by the number of accounts with debt managed during that period. While not every organization seeking to resolve accounts with debt is concerned with profit per se, it also doesn’t want high rates of delinquency to hinder its operations. All the more reason to pursue faster and more efficient means of tracing debtors.
What makes enhanced skip tracing’s success rate possible is artificial intelligence (AI). As it works with more and more data, the machine learning capabilities that AI-powered location solutions incorporate improves their gathering and analytical prowess. In fact, an “experienced” data-driven platform can locate individuals even if all it has to start with is an outdated phone number. Traditional methods, by contrast, often hit dead ends when initial information is limited.
In sum, it’s the comprehensive nature of enhanced skip tracing that powers the higher rates of successfully locating individuals who have debts.
Benefit #3: Cost-effectiveness
Another distinction to point out between traditional search methods and enhanced skip tracing is the expense. Digital methods require notable higher outlays in terms of software, training, and in some cases computer hardware. That upfront spend is likely to raise eyebrows and skepticism from an organization’s purchasing and accounting departments. They’ll want specifics about the payback from the sizable investment in enhanced skip tracing technology.
Despite potentially significant starting costs, enhanced skip tracing is more cost-effective when considering the value of time saved and higher success rates. While traditional methods might be cheaper at the front end, they also take much longer to perform. But because a well-designed skip tracing solution can locate debtors faster than manual methods, it can help organizations expedite the collection of debt payments. And for an organization’s debt collection team, that’s the biggest payoff.
This is also where an enhanced skip tracing solution can best demonstrate its ROI. Collections staffers, after all, are tasked with locating debtors and establishing payment plans in a limited amount of time. Enhanced, technology-driven skip tracing delivers easier access to useful location data for faster investigations, contacts, and resolution.
Value of enhanced skip tracing
The chief value of enhanced skip tracing, then, lies in its efficiency and effectiveness at locating hard-to-find individuals with minimal time investment. To ensure they’re receiving that value, organizations will need to perform rigorous due diligence when considering possible skip tracing solutions. Key benefits to look for include:
- Premium data access. The software should be able to investigate a wide range of up-to-date and accurate data sources, including the top three credit bureaus and bank account header records. It should also be able to sort through all that data rapidly.
- Flexible search criteria. An enhanced skip tracing solution should demonstrate that it can adjust to an organization’s specific operations and objectives. In addition, its interface should be user-friendly for efficient searches and data analysis.
- Comprehensive reporting. The solution should be able to document its findings through distinct report sections, highlighting useful information and removing unimportant details. This capability increases the cost-effectiveness of a skip tracing search process.
Skip tracing software addresses debt collections professionals’ biggest challenges by delivering these value-added benefits. It can help make an often infuriating process more efficient—and thus more financially successful.
Why Thomson Reuters CLEAR Skip Tracing software?
Thomson Reuters CLEAR Skip Tracing is a powerful tool that offers several benefits to users:
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- Flexible search criteria to help you find more with less: Find people quickly through various search criteria. Backed by machine learning, this will help you expedite your collection efforts, even if you begin your search with an old phone number.
- Tailor reports to meet your specific needs: Document your findings through distinct report sections and personalize the report to highlight specific sections or remove details that are not meaningful to you. Then, export and print reports to easily review or share important information.
- Receive fast results from premium data sources: Access critical location information supplied by a myriad of transparent data sources, including the top three credit bureaus and bank account header records.
- CLEAR value: From the timeliness of data, ease-of-use, and return on investment within seven to 12 months, organizations find clear value in CLEAR Skip Tracing.
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Sarah Englund
Professional Service Bureau
Thomson Reuters is not a consumer reporting agency and none of its services or the data contained therein constitute a ‘consumer report’ as such term is defined in the Federal Fair Credit Reporting Act (FCRA), 15 U.S.C. sec. 1681 et seq. The data provided to you may not be used as a factor in consumer debt collection decisioning, establishing a consumer’s eligibility for credit, insurance, employment, government benefits, or housing, or for any other purpose authorized under the FCRA. By accessing one of our services, you agree not to use the service or data for any purpose authorized under the FCRA or in relation to taking an adverse action relating to a consumer application.
