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Article originally appeared on CollectionsandCredit Risk.com on June 3, 2013
By Rollin Girulat
Those of us involved in debt collections know the value we bring to the U.S. economy. A study released by Ernst & Young in 2012 shows the collection industry returned a net profit of close to $45 billion (after commissions) in 2010. However, the benefits derived from the industry involve much more than just a positive economic impact. Beyond recovering past-due debts, there are at least two primary areas in which the industry benefits society: locating criminals and skip tracing.
The techniques for tracking down a wayward debtor also are very valuable to law enforcement agencies. Several vendors in the collection space provide services to the police - with or without a fee. Suppose you are a detective trying to track down a suspect involved in a crime or a parent delinquent on your child support payments. Several methods are available:
In regular collections, the above processes also are known as a deep skip. While not normally used for small-balance accounts, these robust skip approaches for large-balance accounts are equally applicable for locating individuals who can help a criminal investigation.
Several companies provide these services to law enforcement. One of these companies has a Website that lists some of its major successes, including a case where a child was abducted and while there was a suspect, his whereabouts were unknown. Drawing upon the available skip-tracing resources, the police were able to apprehend the alleged abductor quickly and return the child to her parents.
Another company that provides skip-tracing resources specializes in helping law enforcement by identifying and locating pedophiles and provides an extensive, free service to law enforcement agencies globally. “No fewer than 109 children have been found as a direct result of [the late Hank] Asher’s help,” according to Ernie Allen, president of the National Center for Missing and Exploited Children.
A major part of the collections life cycle is skip tracing, or locating consumers whom the debt holder cannot reach. Reasons for no contact can include the following:
Dealing with the above circumstances involves the well-known process of skip tracing, or trying to find the consumer’s current address and phone number.
So what is the point of all this? Skip tracing for nonpaying consumers and locating criminals or persons of interest have a lot in common. The cost of building and maintaining these vast and complex databases is considerable.
Making these resources available to law enforcement would be difficult and challenging without the collection industry’s need for these databases, which allow the costs to be spread over a wider base.
To the average consumer, collectors don’t rank high on the list of admired people. However, members of the collection industry are aware that the tools they employ also benefit our society well beyond collecting on delinquent accounts.