Debt collectors use any number of methods to locate people who owe them money. It’s not an easy task, but debt collection is a serious business and collections experts know when to ask for help from the professionals. Skip tracers may be hired to help with the process of collecting a debt.
So, do debt collectors use skip tracers? Of course, they do. Skip tracers have the experience and tools to find debtors fast. They employ many effective methods for finding those hard to locate people, and use advanced tools and techniques to accomplish the task.
Simply put, debt collectors cannot make any money if they don’t know where the debtor lives – or if they are unable to contact them by phone. They are prohibited by law from discussing the past-due debt with family members or your employer, so they have no choice but to contact the debtor personally. And, they certainly can’t collect any money from anyone but the debtor.
There are very strict laws that regulate the collection of debt. Most notably, the Fair Debt Collections Practices Act which was enacted to protect consumers for unfair and abusive practices used by unscrupulous debt collection agencies. However, this does not mean that these agencies cannot contract with a skip tracer to track down debtors. It’s a very effective practice.
First, it’s important to understand the types of debt collectors, and why they would use skip tracers to assist in finding their debtors. Many debt collection companies simply do not have the internal mechanisms in place to effectively skip trace someone. Databases are a great start, but sometimes having someone perform some “groundwork” can be very effective.
Types of Debt Collectors
Debt collectors come in many sizes and shapes. Some companies specialize in unsecured debt like credit card debt, and others go after the bigger fish that have judgments against them. There are three main types of debt collectors, and all will sometimes use the services of a skip tracer:
- Third-Party Debt Collectors
- Internal Debt Collectors
- Companies that Buy Debt
All of the above may hire a skip tracer at some time or another, so let’s take a closer look at how each of them might use the services of a qualified skip tracer. Remember that skip tracers are not needed in most cases when it comes to collecting debt, but it’s nice to have one on speed-dial.
Third-Party Debt Collectors
Third-party debt collectors will often times use a skip tracer. It all depends on the kind of debt that they have. Are they working directly for a particular bank? Or, are they providing collections work for all kinds of consumer debt as well as money judgments? It makes a difference. This is the kind of debt collector that most people are familiar with.
These debt collectors are working on behalf of the original creditor and usually won’t use a skip tracer. It’s too expensive. They rely mostly on form letters and robocalls. They will split the collections with the original collector – usually around 40 – 50%. They’re not very nice and have been known to tip-toe around collection laws.
Internal Debt Collectors
Internal debt collectors work for the company that initially offered you credit. Let’s say you’re three months behind on your payments on a VISA card that was issued from a bank in North Dakota. This particular bank will have its own collections department that sends out letters and makes calls. Companies can save a lot of money this way by not having to share any percentage of the amount of money collected.
This is the most common type of debt collector. They may or may not use a skip tracer. Credit card debt is usually unsecured, and internal collectors or third-party collectors handle these types of accounts. Internal collections departments rarely use the services of a skip tracer.
Companies that Buy Debt
This is a whole new type of debt collector. They buy debt for pennies on the dollar and keep all collection money to themselves. They may buy consumer debt or judgments. Many times, they turn consumer debt into judgments. They will hire a skip tracer often as sometimes judgments can be worth a lot of money. If the debtor has assets – like property, then they’re gold. Slapping a lien on the property is a great way to get paid.
This type of collector is usually much more aggressive. They have bought debt that the original creditor has deemed uncollectable – and has written off. They probably use a skip tracer more often than the other types of debt collectors.
What is a Skip Tracer?
The name Skip Tracer was originally associated with people that were looking for fugitives. People that could not be located through normal channels – like visiting their home or employment. The word “Skip” means something like “skipped town” or “skipped out on a debt.” Tracing simply means that you’re trying to trace someone’s whereabouts by back-tracking or following leads.
Skip tracers have evolved into a lot more. No longer are they considered seedy characters as depicted in movies and television. Private investigators, process servers, debt collectors, bounty hunters, bail bondsmen – they’re all considered skip tracers these days. And, in some states, people start a business as a skip tracer – depending upon the laws.
Skip tracers are generally very good at what they do. Using the latest databases, software, and techniques, they can track down just about anyone. They have access to some powerful tools as well as contacts and sources of information throughout the country. Sometimes it takes years to develop these sources, and debt collectors invest in their talents to find that ever-elusive debtor.
Debt collectors usually send out form letters demanding payment or offering settlements. And, they robocall all of their accounts on a schedule. Skip tracers are a bit different. They also do the aforementioned, but they’re more likely to start calling neighbors, co-workers, and family members using some sort of pretext. Trap phone lines and blind line services are useful.
Hiring a skip tracer can be expensive. Usually, it will cost a debt collection company around $100.00 per person to skip someone. That’s a lot of money to find one person, but sometimes it’s worth the cost. Most internal and third-party collectors will not go this route. The debt buyers will, however, since many times there are already legal money judgments in place making it easier to perform a bank levy or wage garnishment.
Skip Tracers Toolbox
Skip tracers will start with databases – just like the debt collection companies. However, many times they have more powerful databases as well as some really good sources in the industry. People on the inside of the collections industry like skip tracers have spent years developing sources that most people would never think of.
Finding people is what skip tracers do. They center their entire business around this, and will take great strides to “get their man.” Make no mistake, they are very good at what they do, and it’s almost impossible for someone to avoid them.
How can I become a skip tracer? State and Federal laws regulate this industry. Training underneath a Private Investigator is a great way to go, but there are debt collectors and process servers who know the business very well. It all depends on the licensing laws in your area, and whether or not searching public records constitute “investigating” someone.
How can I avoid a skip tracer? It’s not easy. Basically, you have to refrain from putting anything in your name. If you’re working, and not being paid under the table, they will find you. If you use your social security number, date of birth, or other identifiers – you’re probably going to be found. Stay off the radar. Get a PO Box, live with a friend, and do not put a phone or any other utilities in your name.