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Leverage data quality for skip tracing with digital debt collections

Jordyn Tetler

Collections teams like yours are bracing for an expected surge in consumer debt. Through 2019 and now a pandemic, consumer debt topped $14 trillion and it’s expected to grow. This is a smart time to look for ways to optimize operations, while saving dollars.

Skip tracing with digital debt collections, supported by valid contact data can help you excel collection processes, especially during the pandemic.

As the pandemic uprooted people’s lives, many borrower’s had changes to their income status and, therefore, needed to change their home or work addresses—making payments less frequent and harder for collectors to find their account holders.

Skip tracing with digital debt collections can help locate borrowers through an increasingly-preferred (and relevantly constant) channel: Email. And, with validated email, collectors can be confident that their collections notice is reaching the right borrower, even if their primary address has changed.

We have the answers to your skip tracing and digital debt collections questions to help you get started on excelling your collection operations.

1. What is skip tracing?
Skip tracing is the process of collecting the right information about the customer and tracking down their whereabouts when a customer has stopped making payments for goods or services they’ve purchased.

Whether you’re in banking, high-end retail, automotive, professional services, or any other business that extends credit, your company may be out of options when you can’t locate borrowers and recover part or all of what they owe.

Digital debt collections is an emerging approach to collecting money owed from a customer. Debt collectors are using digital channels such as email, SMS text messaging, and online tools as part of skip tracing efforts; as well as automating workflows and templates to make sure that communications are consistent and compliant with regulations.

2. How does data quality help with skip tracing?
Businesses and collections agencies alike often spend valuable staff time (and budget) chasing down borrowers with incorrect contact information. As part of skip tracing—contact data, credit data, and other information can help locate debtors who are interested in settling debts and negotiating payments.

When you practice data quality and have a complete database of correct emails, phone numbers, and addresses, you can be certain your skip tracing efforts help find your account holders faster, excelling operations and saving valuable time to collect.

3. How does valid emails help with digital debt collections with skip tracing?
One of the simplest tools in digital debt collections is using email communications. While collections teams have traditionally relied on phone calls to reach debtors, fewer people are picking up calls from phone numbers they don’t know.

At the same time, email is not only a popular channel, but an increasingly effective way of recovering debt. A 2018 survey of North American credit card customers found that 73% of those in late delinquency took action (made a payment) when contacted digitally. Yet, collections agencies are still hesitant to use email as a communication channel.

To make sure your collections team has access to accurate emails, it’s important to append and validate your email list. Here’s why:

• For those collections teams who don’t already have email addresses in their database, appending emails will input correct emails associated with the account holder—now, you have emails!
• For those who have emails, but unsure of their validity—contact information can become inaccurate at the point of capture due to human error or unmonitored data collection—verifying emails will ensure that each email address is complete and correct.

Now your collections team is enabled to reach the right borrowers by leveraging accurate contact information. By appending and verifying emails, you now have the option to try a digital debt collections operation, too!

As people settle into their new normal, now is the time to use skip tracing with digital debt collections to effectively reach your account holders. With trustworthy email, you can increase both your borrower’s and collector’s experience to collect debt while saving cost and time.

Collections leaders, learn more about how effective email helps recover more debt in digital collections. We’re here to help.

Collections leaders, learn more about how effective email helps recover more debt in digital collections. 

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