What are Skip Tracing Techniques?

Skip Tracing Techniques

Skip tracing in accounting refers to the process of locating individuals or entities that have defaulted on financial obligations, such as unpaid debts or missing payments. This technique is commonly used by debt collectors, financial institutions, and businesses to track down debtors who have become unresponsive or have intentionally avoided contact. Here are some common skip tracing techniques used in accounting:

• Database Searches: Utilizing various public and proprietary databases to gather information on the debtor. This can include credit reports, public records, utility bills, and other financial records.
• Social Media and Online Presence: Investigating the debtor’s online activities, such as social media profiles, to gather information on their current location, employment, and lifestyle.
• Phone Number and Address Checks: Verifying and cross-referencing phone numbers and addresses through telephone directories, reverse lookup services, and online address verification tools.
• Contacting Known Associates: Reaching out to friends, relatives, employers, and other known associates who might have information about the debtor’s whereabouts.
• Public Records: Accessing public records such as court filings, property records, business licenses, voter registrations, and vehicle registrations to track down the debtor.
• Credit Bureau Reports: Using credit bureau data to obtain the debtor’s latest credit activity and any recent changes in their financial situation.
• Postal Services: Utilizing postal services like forwarding addresses and change-of-address records to locate individuals who have moved.
• Field Visits: Conducting physical visits to last known addresses or places of employment to gather information from neighbors, landlords, or current residents.
• Professional Skip Tracers: Hiring specialized skip tracing professionals or agencies that have access to advanced tools and techniques for locating hard-to-find debtors.
• Utility and Service Providers: Checking with utility and service providers (e.g., electricity, water, cable) for any recent account activity that could indicate the debtor’s current address.

These techniques help in gathering as much information as possible to locate the debtor and take necessary actions to recover the outstanding debts.

Example of Skip Tracing Techniques

Certainly! Here’s a detailed example illustrating how skip tracing techniques can be used in a practical scenario:

ABC Financial Services is trying to locate John Doe, who has defaulted on a personal loan and has become unresponsive to collection efforts. The last known address and phone number are no longer valid. ABC Financial Services decides to use skip tracing techniques to find him.

Steps and Techniques Used:

• Database Searches:
  • Credit Report : ABC Financial Services pulls John Doe’s credit report to check for recent credit activity, such as new credit card applications, which might reveal his current address or employer.
  • Public Records: They search public databases for any recent property transactions, court filings, or business licenses under John Doe’s name.
• Social Media and Online Presence:
  • Social Media Profiles: The skip tracing team checks John Doe’s profiles on Facebook, LinkedIn, Twitter, and Instagram. They find that he recently posted a photo tagged in a different city.
  • Online Search Engines: A search reveals that John Doe participated in a recent community event, providing clues about his current location.
• Phone Number and Address Checks:
  • Reverse Lookup Services: The team uses a reverse phone lookup service to check if John Doe’s phone number has been reassigned or linked to a new address.
  • Address Verification Tools: Online address verification tools help confirm if John Doe’s old address has any forwarding information.
• Contacting Known Associates:
  • Friends and Relatives: The team reaches out to individuals listed as references in John Doe’s loan application, asking if they have any information on his current whereabouts.
  • Employer Contact: They contact John Doe’s previous employer listed in the application to inquire if they have updated contact information.
• Postal Services:
  • Change-of-Address Requests: ABC Financial Services checks with the postal service to see if John Doe has filed a change-of-address form.
• Field Visits:
  • Physical Visit: A field agent visits John Doe’s last known address and talks to the current residents and neighbors to gather any leads on where he might have moved.
• Utility and Service Providers:
  • Utility Records: The team checks with local utility companies to see if John Doe has opened any new utility accounts.

Through these combined efforts, ABC Financial Services discovers that John Doe has recently moved to a nearby city and taken up a new job. They obtain his new address from a recent credit card application found in his credit report. ABC Financial Services can now contact John Doe at his new address to arrange payment of the outstanding loan or take further legal action if necessary.

This example demonstrates how various skip tracing techniques can be effectively used to locate a debtor who has become unresponsive, combining technology, public records, and personal interactions to gather necessary information.