Collection Advisor March/April 2016

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USING TECHNOLOGY TO EMPOWER C

AVOID MISTAKES WHEN PURCHASING INSURANCE AND BONDS PUZZLING WORLD OF REGULATION AND SKIP TRACING THE GROUP & SERIAL NUMBERS OF A SOCIAL SECURITY NUMBER MANAGING UNCONVENTIONAL SKIP TRACING DATA THE ART OF SKIP TRACING HOW TO AVOID LAWSUITS U.S. INDEBTED TO THIRDPARTY DEBT COLLECTORS 12 BENEFITS OF CALL RECORDING DEALING WITH 10 EVASIVE TACTICS

March/April 2016

Vol. 16, No. 2

Debra J. Ciskey

LETTERS—

A COMPLIANCE OFFICER’S NIGHTMARE

Collection Advisor P.O. Box 92342 Southlake, TX 76092

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4 Ron Brown 6 Sam Edens 8 Debra J. Ciskey 12

Harry A. Strausser III

14

Sam Eidson

16

Fred N. Blitt

10

T. Steel Rose, Editor

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SKIP TRACING

WITH TRAINING TOOLS

e m o c l e W A

collection professional cannot close an account until he or she can locate the consumer to collect. This is why this March/April issue of Collection Advisor is focused on skip tracing. General collection philosophies tend to gravitate to relatively the same conclusion as skip tracing philosophies seem to be personalized to suit each individual agency. The following issue will help you hone your agency’s tactics and hopefully lead to more located consumers.

This issue also takes us in Flowood, Mississippi talking with Dick Williams of Healthcare Financial Systems for the Agency Spotlight. Williams discusses how they handle finding the location of millions of skips for the healthcare industry and still manage to keep the mounds of data perfectly organized.

Compliance Advisor Debra J. Ciskey provides an overview of letters and breaks down important requirements for each state. Collection Advisor’s new Agency Advisor, Sam Eidson, describes key aspects to inspect on potential skip tracing solutions. Skip Tracing Advisor Ron Brown expands on his thoughts from last issue about social security numbers describing how a tracer can derive a location from particular numbers. Technology Advisor Sam Edens describes how an agency can handle unusual skip trace information and still not slow down the processing of thousands of accounts.

Benchmark Advisor Harry A. Strausser III discusses training and the considerations involved in developing a great training program. As your First-Party Collection Advisor, I describe the first-party collection process in detailing some evasion tactics used. Legal Collection Advisor Fred N. Blitt details the process of onboarding a skip tracing vendor and the costs related.

Next issue Collection Advisor will be examining government collections. Until next time, we look forward to hearing from you.

T. Steel Rose CPA, ACS Editor

editor@collectionadvisor.com

Checklists and Training Tools

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CollectionAdvisor.com ACCESS ONLINE

USING TECHNOLOGY TO EMPOWER COLLEC TIONS www.CollectionAdvisor.com

March/April 2016

ADVISORS

Volume 16, No. 2

FEATURES

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SKIP TRACING ADVISOR

The Group and Serial Numbers of a Social Security Number Ron Brown

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TECHNOLOGY ADVISOR

Managing Unconventional Skip Tracing Data Sam Edens

COMPLIANCE ADVISOR

BENCHMARK ADVISOR

No Pain, No Gain: Train, Train, Train Harry A. Strausser III

24 26

23 24 25

12 Benefits of Call Recording

JOSHUA FLUEGEL

U.S. Indebted to Third-Party Debt Collectors

AGENCY ADVISOR

ACA INTERNATIONAL

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Collection Products & Services Directory

DEPARTMENTS

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2

T. STEEL ROSE

How to Avoid Lawsuits

The Art of Skip Tracing and How It’s Evolved Sam Eidson

What Is Your Cost of Skip Tracing?

Fred N. Blitt

JOSHUA FLUEGEL

14

LEGAL COLLECTION ADVISOR

Puzzling World of Regulation and Skip Tracing Comparison Chart and Checklist

2016 Collection Products & Services Directory

12

Agency Spotlight

Dick Williams, president of Healthcare Financial Services

Letters — A Compliance Officer’s Nightmare Debra J. Ciskey

Dealing with 10 Evasive Tactics in First-Party Collections T. Steel Rose

JOSHUA FLUEGEL

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FIRST-PARTY COLLECTIONS ADVISOR

JOSHUA FLUEGEL

Avoid Mistakes When Purchasing Insurance

and Bonds

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A Map to Online Skip Tracing Data

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Group and Serial Numbers of a Social Security Number

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ROUTING SLIP

Initials

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In the last issue we looked at one of the tracer’s primary tools, the Social Security number. This tool is used daily by tracing professionals to locate people and assets and the knowledge of its intricacies is a must for the tracer. In this issue we will take a look Ron Brown at the second and third group of numbers, the group number and the serial number, to better cipher their meanings and how this will aid us in our endeavors. several steps to prevent counterfeiting of the SS card. This counThe group number, the fourth and fifth digits of the SSN, terfeit-resistant version is now used for both original and replacewas initially determined by the procedure of issuing numbers ment cards. Several other steps, which the SSA will not openly in groups of 10,000 to post offices for assignment on behalf disclose have also been taken to improve the security of the card. of the Social Security Board’s The next question is one I Bureau of Old-Age Benefits. The have been asked many times and group numbers range from 01 to one I have asked government offi“We must charge a $35 (effective August 99 (00 is not used), but for adcials associated with the SSA many 2012) fee to cover our costs when the ministrative reasons, they are not times: “What information does assigned consecutively. Within the SSA have in my file?” letter is to inform the missing person each area number allocated to a One of the most obvious of money or property due him or her.” state, the sequence of group numpieces of data the SSA possesses is ber assignments begins with the where I am employed; as my emodd-numbered group numbers ployer has to report my earnings from 01 to 09, followed by even group numbers 10 through and remit SS contributions monthly. Don’t we wish we had 98, then even numbers 02 through 08, and finally odd num- direct access to that information? In a round about way we do. bers 11 through 99.

This is from the SSA website: The serial number, the last four digits of the SSN is pretty We will attempt to forward a letter to a missing person unsimple to understand as it represents a straight numerical series der circumstances involving a matter of great importance, such of numbers from 0001–9999 within each group. Serial number as a death or serious illness in the missing person’s immediate 0000 is not assigned. family, or a sizeable amount of money that is due the missing The use of the SSN has expanded for other purposes far person. Also, the circumstances must concern a matter about beyond what it was originally intended. The SSN, originally not which the missing person is unaware and would undoubtedly intended to be used for identification purposes, is probably used want to be informed. (Generally, when a son, daughter, brothtoday more than any other item as a primary means of personal er, or sister wishes to establish contact, we write to the missing identification. It is required on all credit, employment, financial person, rather than forward a letter from the relative.) There is documents and the list could go on and on. All people possess no charge for forwarding letters that have a humanitarian purone common denominator…their SSN. pose. However, we must charge a $35 (effective August 2012) The Social Security Administration recognized that changes fee to cover our costs when the letter is to inform the missing were required to protect the integrity of the card and has taken person of money or property due him or her. This fee is not

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Skip Tracing Advisor

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“The identifying information needed is the person’s date and place of birth, the father’s name, and the mother’s full birth name.” refundable. The fee should be paid by a check that is made payable to the Social Security Administration.

We must read each letter we forward to ensure that it contains nothing that could prove embarrassing to the missing person if read by a third party. We do not believe that it would be proper to open a sealed letter; therefore, a letter that is sent to us for forwarding should be in a plain, unstamped, unsealed envelope showing only the missing person’s name. Nothing of value should be enclosed.

To try to locate an address in our records, we need the missing person’s Social Security number or identifying information to help us find the number. The identifying information needed is the person’s date and place of birth, the father’s name, and the mother’s full birth name.

Usually, we forward a letter in care of the employer who most recently reported earnings for the missing person. We normally would have the current home address only if the person is receiving benefits. Therefore, we cannot assure that a letter will be delivered or that a reply will be received. Also, we cannot send a second letter.

Requests should be sent to: Social Security Administration Letter Forwarding P.O. Box 33022 Baltimore, MD 21290-3022 What other information does the SSA collect on individuals as part of their data gathering process?

• Employee name • Employee address • Name of current employer

• Employer address • Age of employee • Date of birth • Place of birth • Sex • Ethnicity • U.S. Employment Service (USES) registration card number, if applicable • Date and place of previously completed SS-5, if applicable • Completion date for current SS-5 • Signature (SSA 1990) Join us in the next issue for another installment on a full understanding of the tracer’s tool, the SSN. Ron Brown is a member of the National Association of Fraud Investigators and the author of “MANHUNT: The Book.” Contact him at rbrown2150@aol.com.

Managing Unconventional Skip Tracing Data ROUTING SLIP Initials

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The common skip trace practice many third-party agencies follow after loading a new placement file is to address skip trace, phone number skip trace, bankruptcy skip trace, deceased skip trace, and credit score. Most collection professionals are well versed on this now monotonous routine. All agencies do it.

The difference lies in how the return data is evaluated, captured, and embedded into the daily workflow for managing the inventory. However, there are some other, unconventional skip tracing services and often, they will provide some very revealing information. This information may be just enough to separate you from the competition. I would like to detail three unconventional skip tracing services and more importantly, ideas for how to manage them in your receivables management software.

Possible Incarceration

You may eventually discover a consumer is incarcerated over the course of working the account but have you considered running a skip trace for incarceration before any effort goes into contacting the consumer or sending a letter? Executing this skip trace and identifying a consumer is incarcerated will allow your representatives to focus on accounts that are more collectible.

The possible incarceration skip trace should be scheduled one of two ways. First, the request can be automated to run with your normal skip trace service requests (address, phone, bankruptcy, deceased, credit score). Alternatively, you have your regularly scheduled requests run first and then based on those results, segment the ideal consumers for a possible incarceration skip trace.

For example, if you receive a return that a consumer is deceased or has a credit score less than 400, your automated workflow may be set up to automatically close the account. In those cases, your skip tracing automation should bypass that consumer altogether for the possible incarceration scrub.

When receiving a hit for incarceration, some decisions need to be made. Most often, a release date (if applicable) is provided with the incarceration hit. Depending on the duration of the incarceration, you may option to close the account and re-open it immediately after the release date. On the other hand, you may just want to close the account and archive it.

Either way, let your system handle it with built-in automation.

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Technology Advisor Sam Edens

Possible Litigious Debtor

The litigious debtor skip trace could save thousands of dollars in legal costs. This may be one of the most fascinating services available these days. A returned hit on this service may indicate you are facing a consumer who has filed one or several lawsuits against agencies. It exists because consumer lawsuits against agencies and first parties are on the rise. Furthermore, consumer initiated lawsuits are steadily increasing because more and more consumers are becoming well educated on the FDCPA and other federal or state regulation.

Unlike the possible incarceration skip trace, you may want to set up workflow to run the possible litigious debtor skip trace right away. If a hit is returned, most agencies establish rules in the software to immediately flag and close the account in an effort to eliminate any contact whatsoever. When going this route, utilize workflow or other automation to close the account, remove it from any dialing queues, stop any other skip tracing efforts, halt all contact attempts, and flag the consumer so it is understood to steer clear of this account.

Property

This skip tracing service is a fun one and can arm your representatives with some very valuable information prior to contacting the consumer. The property skip trace will inform you if the consumer has recently purchased, leased, or somehow acquired new property. A house, condo, and land are all property examples.

This information is especially valuable when a representative is working a consumer who indicates they are on a tight budget or simply does not have the financial resources to repay the debt.

As for automating this service, it is best to send the request after your first blast of skip tracing. You will want to carefully March/April 2016

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“The litigious debtor skip trace could save thousands of dollars in legal costs. “ segment and select the consumers you want for the property skip trace. Construct the workflow to select consumers with a valid phone number and address, populated with full SSN, an outstanding balance that justifies the property skip trace, and a moderate to high credit score. Unlike possible incarceration and litigious debtor, turning on monitoring is a great idea for this service. This will allow your skip trace provider to continuously seek property hits for the consumer, rather than a one-time scrub, and notify you when a new hit becomes available.

With this information, a representative can easily counter an excuse-ridden consumer by simply questioning his financial position since he has recently purchased a new property.

Before jumping right into unconventional skip tracing, you must first develop guidelines for isolating and marking the consumers for these different services, for identifying them when hits are received, and for the special handling they require. Regardless of the decisions for implementing unconventional skip tracing or managing the returns, store the data in your software or data warehouse and make the process automated in your software by including it in your everyday workflow.

Sam Edens has been with Emprise Technologies since 2006 and is currently serving as Vice President. Prior to his time with Emprise, Sam designed and developed performance and flow management software for UPS.

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Letters — A Compliance Officer’s Nightmare ROUTING SLIP

Initials

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I have heard more than one compliance officer lament about the risks involved in sending correspondence to consumers. Even operations staff prefer not to send letters, as the common belief is letters do not collect money — collectors collect money.

The abundance of state requirements related to collection letters complicates the issue since the requirements often relate to the attributes of an individual account. For example, if you are sending a letter to a consumer that is an initial notice related to medical debt on an account that is purchased, and is out of statute yet still eligible for and intended to be credit reported, there are at least four distinct disclosures that must be provided under state law, notwithstanding the federal validation notice and MiniMiranda requirements. If you have spoken with the consumer and demanded payment in a language other than English before

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Compliance Advisor Debra J. Ciskey

these notices have been sent, then your disclosures would have to be provided in that language. The irony is that consumer groups and some regulators have expressed their opinion that communications with consumers are best achieved in writing. With a response rate of less than 5%, this stance is difficult for industry members to understand.

State Specific Letter Requirements Categories

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Applicable States

Right to cease communication

Colorado, Massachusetts (POE cease)

Credit reporting language

California, Utah

Disclose existing creditor/debt collector financial or managerial relationship

Utah

Initial notice special language

California, Colorado, Illinois, Minnesota, New York, Washington

Itemizations in subsequent communications

Washington

Language requirements

California, New Mexico

License/permit number and/or regulator info

Colorado, Minnesota, New York City, North Carolina, Tennessee, Wisconsin

Medical collection specific language

California, Connecticut, Minnesota (hospital), Nevada

Out-of-Statute debt language

California (purchased debt), Connecticut, New Mexico, New York, New York City, West Virginia

Purchased debt specific language

California, New Mexico March/April 2016

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Review Special Text Requirements and State Specific Language Used By Your Letter Vendor Luckily, resources related to state law requirements are readily available. My favorite resource and most familiar resource for the most up-to-date information on these requirements is ACA International’s SearchPoint (formerly known as FastFax). This database of issue-specific resources is a benefit of membership in ACA. The documents are updated frequently. I recently reviewed two of the documents, Special Text Requirements and State Specific Language, in my annual review of our own company’s notices and instructions to our letter vendor. In addition, ACA’s compilation of State Collection Laws and Practices is equally as helpful, but as it contains much more information, it may take more time to digest. Other organizations have available resources, but I rely on the ACA references. The collection letter requirements fall into 10 distinct categories which I have listed, along with the states that have requirements in the categories. Space limitations prevent me from providing the text of the requirements, but anyone contacting consumers in the states mentioned, if the category is applicable, should seek to ensure notices address the requirements. Also, the collection of bad checks carries its own set of state required disclosures, and those are not included in the categories in the chart.

Let’s get back to the basics first. To meet requirements of

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March/April 2016

many states, all letters should include: 1) the date the letter was generated, 2) the licensed or registered name of the collection agency, 3) the agency’s address, 4) the toll-free phone number of the debt collector, 5) the agency’s days and hours of operation, 6) name of the creditor, 7) account balance, 8) name of the intended recipient, and 9) the purpose of the letter. State requirements are in addition to those requirements. Also, the recent spate of lawsuits resulting from account numbers and/or other strings of alphanumeric characters, bar codes, and QR codes showing through the window on envelopes caution us from using these until this matter is settled once and for all. Let’s not forget disclosures that would be suggested by federal enforcement actions related to out-of-statute debt. SEE CHART PRIOR PAGE Getting it right with your letter vendors is the next challenge. Communication, quality control, and oversight are the keys here. Ultimately, the debt collector is held responsible for omissions, so don’t make assumptions — check, check again, and recheck.

Debra Ciskey is the Compliance Officer at Wakefield & Associates.

Inc. She is a member of the board of directors and a certified instructor for ACA International.

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Dealing with 10 Evasive Tactics in First-Party Collections

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ROUTING SLIP Initials

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First-Party Collections Advisor

Any robust, credit-based economy requires trust for the system to work. While most people pay their bills, there is also an active group who attempt to evade those who they owe money.

Since, everyone who pays their bills is essentially paying the way T. Steel Rose, Editor for those who do not, it seems “freeloader” is an appropriate description. Curious about the origin of the word I did some research but was not able to locate any attractive synonyms. Mer- freeloader may offer a ridiculously low settlement because they riam-Webster’s thesaurus lists: bloodsucker, leech, free rider, are the victim. Evasion Tactic Number 4: vigorous intimidation hanger-on, moocher, parasite, sponge, and sponger. Just like in tactics by the opposing attorney about your notification and colconsumer collections, there are businesses with the ability to pay lection procedures. Now this freeloader must pay an attorney to that try to evade payment. defend the vacuous evasive tactics As soon as the account is past rather than acknowledge he does “Laches indicates some form of delay on your part. due it is necessary to send weekly not pay for services. His attorney’s There are several forms such as, ‘inexcusable delay,’ job is to throw everything in your letters of advancing severity. After the third week it is necessary to way to avoid coming to terms with ‘failure to assert rights,’ ‘lack of diligence,’ and notify the old customer you will the truth. ‘neglect or omission to assert a right.’ They are put be referring the account to a colThis saber rattling may be lection agency or law firm. Also styled as Evasion Tactic Number 5: forth in thin hope by the ex-customer to dissuade give them a phone call to make an affirmative defense. These deyou from entering a protracted legal battle.” sure they received the letters. fenses are sometimes referred to as Here is where the evasion begins. unclean hands or laches. “Unclean Evasion Tactic Number 1 is, “We never received the bill.” Now you hands” refers to something you did in providing services that must fax the bill and send it certified in addition to regular mail. may have exacerbated the liability of the ex-customer. You fulEvaders may never retrieve certified mail. Now, everyone else filled the terms of the contract while they hoped you would not. must pay more for your services because the freeloader requires Laches indicates some form of delay on your part. There are sevadditional service and expense. eral forms such as, “inexcusable delay,” “failure to assert rights,” Fortunately, collection agencies and attorneys work on “lack of diligence,” and “neglect or omission to assert a right.” contingency but both require court costs advanced before a They are put forth in thin hope by the ex-customer to dissuade court case may proceed. Freeloaders may not respond seriously you from entering a protracted legal battle. If you performed until they receive a letter from an attorney in their county, as expected, according to agreement and invoiced timely, these which leads to Evasion Tactic Number 2: “We are not a corpo- are sad ploys by defending attorneys who are trying to justify an ration in this state.” Your attorney may need to file suit in untenable situation. the claimed state of incorporation knowing the case is likely Now you are in a full-fledged legal battle, which leads to to come back. You may need to pay for court costs of about Evasion Tactic Number 6: discovery and interrogatories. This is $500 to file suit and visit your bank to obtain notarization of a package of questions and demands to again provide all the any affidavit. things you already provided: the invoices, statements, the Evasion Tactic Number 3: “We never authorized this contract.” contract of proof of providing service. There is no reason to give While casting the blame on an employee or subcontractor, the up yet just because the opposing attorney is now receiving the

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March/April 2016

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Email nominations to josh@collectionadvisor.com Nominations close March 15th Rose - Continued from page 10 money the freeloader should have paid your company.

Now is where the fun begins, Evasion Tactic Number 7: depositions. You are compelled to be questioned by opposing counsel while a court reporter records every word. Prepare as if you were going to court on the day of the deposition.

Since you filed in the ex-customer’s county and state, find someone or something fascinating to visit when you arrive. Opposing counsel hopes you will not arrive.

Evasion Tactic Number 8: “new business” freeloader will offer new business if you will settle for a lesser amount for the prior debt.

Evasion Tactic Number 9: expect a settlement conference before depositions begin or before the actual trial begins, even in the judge’s chambers. The rattling of sabers is over. The weight of your case makes an actual trial absurd. Oddly enough it is rare for judges to award attorneys fees.

Evasive Tactic Number 10: depositions have determined there are no fact questions in question. There may be a decision .com

March/April 2016

needed by a judge to apply a question of law. For example, are written contracts enforceable across state lines, hmmm, yes. Or, does the concept of agency, whereby employees or subcontractors bind companies, hmmm, yes. But applying law is not absolutely certain. The judge at trial may be very sympathetic to all debtors and may not understand the harm freeloading causes to all other consumers and businesses. The evasive tactics applied here are attempted and sometimes successful. Such attempts can include an effort to reschedule attorney conferences based on illness or death in the family. The opposing attorney’s client may attempt bankruptcy and incorporate in another state nearby.

Happy Ending: When any old freeloading customer provides payment, which may be over a year later, they are redeemed. It is wise to obtain a credit card to guarantee payment and test it for validity or obtain payment for any new business in advance. They are no longer in freeloader status. Although they put you through the ringer, if the customer makes

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No Pain, No Gain:

Train, Train, Train

ROUTING SLIP Initials

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Education, in my opinion, is the very foundation of professional success in life. Our culture today dictates that, “in order to get a good job and make a good living you have to get a degree of some kind.” Students enroll in trade schools, community colleges, and universities in unprecedented numbers. Operators in our industry that collect on student loans can attest to the volumes of accounts placed with their organizations. Unfortunately, this education — these degrees, do not guarantee an actual job upon completion. There are lots of unemployed, educated young people across our nation.

Often, collection organizations are fortunate to acquire some of these smart, job-seeking candidates. Their degrees may not be germane to a collection position but these students are accustomed to learning. They embrace education. Counter to these entrants are the many non-degreed applicants that arrive in our offices. They have no formal education and struggle to find a good career. Applicants at both ends of this spectrum can become valuable, profitable and meaningful additions to our organization if they receive the proper training.

In the average collection office or department, when someone says the word training, managers cringe and run screaming into the hallways, team supervisors jump out of seventh floor windows, operations directors get a glazed look of confusion, and C level management says, “What is this thing called training?” Those that need training slit their wrists over break and occasionally new hires start a collection 2. job at 8 a.m., leave for lunch at noon, and never return. Oh, sorry, that was a horror movie I watched last week. But does it sound amazingly and sadly familiar? Much pain, little gain, if we don’t know how to train!

I might have exaggerated a little on this example, but many organizations view training as a necessary evil. Something you need to do up front so you can get the collector on the floor to make your department/firm some money. In the training and consulting I have done over the years I have encountered firms that train a new collector for as little as two days and others that won’t release a new collector to the floor for a minimum of 30 days. Whatever the ramp up time frame in your office, you need to have a plan that not only includes new hire onboarding training but a topical outline of thoughtful, meaningful, and timely education programs. Most firms take a proverbial shotgun approach, but cutting edge firms develop an educational program.

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Benchmark Advisor Harry A. Strausser III

In benchmarking off of successful training programs you should consider the following: ■■

■■

■■

■■

■■

■■

■■

ire a Compliance Director to identify topics of timely H importance, audit communications, develop office policies and SOPs, and deliver content to staff.

Create a Training Manager/Director position. This person will continually assess educational needs while working in conjunction with the Compliance Director. The training manager will coach other trainers in large organizations and present education regularly in smaller firms.

Develop a clear, detailed training agenda/itinerary that will guide those that deliver education. Every day should be charted out hour by hour, particularly for the first two to four weeks, with specific content, talks, testing, and monitoring.

Continually assess educational needs and search out industry resources for program content. There are firms that offer hosted compliance testing portals with dashboards designed for management review.

Create an actual training program that not only starts with the onboarding education you already have in place but then introduces continual topical refreshments and new timely information for the entire tenure of company staff members.

Develop interesting and professional training modules that not only engage the learner but have the appearance and content of a contemporary, timely and thoughtful educational program. I can’t tell you how many training consultations I’ve done where during content/material review we uncover old, yellowed, dog-eared handouts from decades ago. Two years ago one organization was still using an overhead projector!

Track your training through either a learning management March/April 2016

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Strausser - Continued from page 12 system or simply through a less formal method in your HR department. But track it accurately. Often firms conduct programs and/or send staff out to training but fail to document the date, topic, and successful completion.

The world in which our industry operates is dramatically different today than 20 years ago. There is an expectation by regulators, the organizations we support or clients we represent, to have a well-educated, groomed and compliant team. There is a lot of pain in maintaining a training program, but the gains are immense and the outcome places your organization in a better position for economic success, staff member retention, loyalty, and the sustenance of a highly compliant culture.

We encourage our readers to submit a “best practice” idea for inclusion in this column. Until next time, I’m in a collection office near you!

Harry A. Strausser III is president of Remit Corporation/Interact Training & Development.

July/August 2015 www.CollectionAdvisor.com .com March/April 2016

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The Art of Skip Tracing and How It’s Evolved

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When I entered the collection industry almost two decades ago we had hardly any of the tools at our disposal that we do today. I can remember the days of calling a lumber yard in a small town because I knew the builder I was looking for would be known in the area. I also remember speaking to a relative who said the consumer was in their bowling league, looking up the nearest bowling alley and calling the consumer there. Now practices like that are frowned upon and a thing of the past due to heavy oversight from regulators. Even calling a reference or nearby may be more risk than it’s worth just based on the probability of generating a potential complaint. In accordance with the Fair Debt Collection Practices Act, you can communicate with a third party one time in order to obtain location information which is defined as home address, home phone number, and place of business.

The art of skip tracing has come a long way from the days of using the criss cross directory, phone book, directory assistance, or having a Rolodex full of contacts from other companies with whom you share information. While the county tax assessor, court house, and utility records remain a good source of information, more and more businesses are getting away from in-house manual skip work and are looking for ways to automate and outsource the process allowing their employees to focus on the most important thing, collecting money.

There are many factors to consider when choosing a skip trace service. Are they compliant, what are their success rates, and most importantly, what is the cost?

Compliance

If you are going to outsource your skip tracing needs it is important to ensure the skip provider is compliant with GLB, FDCPA, FTC and FCC regulations. Do they have a license, carry proper insurance, and can they provide references?

I would suggest having them complete a security questionnaire and conducting an onsite visit prior to signing a contract, which is becoming more of a requirement from clients.

Success Rates When choosing the right partner, ask:

• How do they compare against their competitors?

• What are their hit rates?

• Do they focus on quantity or quality? More numbers to call equals more liability and cost. You want to make sure you are getting the most current and accurate information.

Cost 14

Are they willing to run a test file to compare against

ROUTING SLIP Initials

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Agency Advisor Sam Eidson

their competitors or your manual approach? Another factor to consider is the price per hit. Closely monitor to make sure the hits you are receiving are unique to what you already have. Does the price per hit decrease based on volume? Do they continuously monitor for new information or collection triggers?

There are many databases out there sharing consumer information making it easier and easier to find people. One of the most effective cost efficient sources for location information is social media. The only caveat is the compliance factor. How many of you receive a notification when someone visits your LinkedIn page? You are accessing personal consumer information so the concern is how you control how far your collector goes in order to reach the consumer. What controls can you put in place to ensure your collectors aren’t sending private messages, posting on the consumers wall or even using social media for personal reasons.

For those of you who still have employees manually skip tracing accounts, always remember when searching, less is more.

Start by using the least amount of consumer information and refine as needed to get the most accurate information available. For instance, if the consumer you are searching for has a unique last name, start by searching only their last name closest to their most recent address. When searching for a place of business try including the consumer’s zip code, so you can find the closest location to the consumer’s home and broaden your search as needed.

In conclusion, there’s not a cookie cutter approach to skip tracing. Every company has their own strategy, budget, and resources. Whether you continue with the manual approach or choose to automate your skip tracing needs, it is important to remember compliance, success rates, and cost are the most important factors.

Sam Eidson is the Director of Compliance for Delta Outsource Group, Inc. He also serves on the Board of Directors for the Missouri Collectors Association.

March/April 2016

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A MAP TO ONLINE SKIP TRACING DATA

BY JOSHUA FLUEGEL

T

here is no correct way to scour the Internet for data on a consumer. The troubling thing about this is that means there isn’t exactly a defined wrong way to do it either. Does a particular website have accurate data? Does this other one charge too much for the data it supplies? Am I breaking the law by using this website for this reason? All of these are questions that need to be answered on top of the burdensome task of locating a skip. The following websites are resources a collection professional/skip tracer may want to include in its tracing efforts.

Basic Search

This first group of websites range from the obvious to the less-known. These are often the first stop in a tracer’s pursuit of a skip.

• www.google.com • www.dogpile.com • www.infospace.com • www.duckduckgo.com

Social Media

Social media websites are vast and continually changing pool sources. This works to both its advantage and disadvantage; there is a lot of information there but who knows how valid it still is as the skip may have moved his or her focus to another forum. The demographic for each of these websites varies so a marketing mind would be beneficial.

• www.facebook.com • www.linkedin.com • www.twitter.com • www.jigsaw.com • www.blackplanet.com • www.flickr.com • www.tagged.com • www.pipl.com • www.skipease.com

Government Sources

Several of these websites can come in handy a little further into a trace. Immigrations and Customs as well as the Bureau of Prisons give a tracer the opportunity to quickly search for a skip. Other sites listed here provide lists of government sites that could prove helpful when looking for information on domestic and international skips.

• www.archives.gov • www.sagal.com/ajax • https://locator.ice.gov/odls/homePage.do - U.S. Immigrations and Customs.

• www.bop.gov - The Federal Bureau of Prisons.

• www.pacer.gov - The Public Access to Court Electronic Records does not directly charge users of the system but does have a $0.10 per page charge as dictated by the Judicial Conference of the United States.

• The website of the skip’s respective county appraisal district .com

March/April 2016

can normally reveal valuable information about a skip. Different county’s websites vary in intuitiveness making this task easier or more difficult.

• Visit the website of the skip’s respective secretary of state to perform a UCC-1 (uniform commercial code) search and request a financing statement revealing if the skip has financed property, what the property is, and corresponding information about the skip. There is normally a charge but the resulting documentation can be very enlightening.

Miscellaneous Sources

The following websites are a few more a collection professional should consider when looking for data on consumers. These sources can lead a collection professional to additional websites where they may discover additional useful sources. Some of these are free, some of them cost, and some offer a limited number of free searches.

• www.blackbookonline.info • www.dobsearch.com - A user receives seven free basic searches in a 24 hour period.

• www.pimall.com/nais/SKIPTRACE.HTM [Notes the caps]

Paid Services

If automation and speed are paramount, the use of a skip tracing vendor could be the right choice. Several of many options are listed below.

• www.ididata.com - IDI • www.LocateSmarter.com - LocateSmarter • www.melissadata.com - Melissa Data • www.microbilt.com - MicroBilt • www.oneclick-data.com OneClick-Data • www.pdjservices.com PDJ Services • www.clear.thomsonreuters.com Thomson Reuters • www.skiptracers.com - VeriFacts

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What Is Your Cost of

Skip Tracing?

ROUTING SLIP

D

Determining the cost of skip tracing to your collection law practice is much more detailed than it seems. Certainly, in today’s highly regulated environment, the cost is higher today than in past years.

The first question today revolves around who is your skip tracing vendor. Is the company well known like TransUnion or is it a smaller company using a more manual process? One of the big issues today is the concept of a Vendor Management Program. Many clients today expect law firms to have a detailed program where the law firms would “onboard” the skip trace vendor.

Now in many instances, this process may be easy because the vendor is large, well known in the industry, and might even be used by the client. In these instances, while the law firm must still complete the onboarding process of the vendor, the client is not likely to scrutinize the vendor; in other instances, not so much.

Specifically, your onboarding process must determine whether the skip trace vendor has access to Non Public Information (NPI). In these instances, the scrutiny by the law firm must be much more strict. For example, what access does the vendor have to your database? Do they have complete access or partial access?

This brings up the whole “audit” question during the onboarding process of your vendor management program. Clients have asked me, “how do you know that the vendor’s access to your system is locked down.” The response cannot be, “because they said so and checked the box on the questionnaire.” This is a big deal today. You need to audit these vendors or have a third party audit these vendors to make sure what they are saying meets and exceeds your approved compliance standards.

Once you determine that the vendor is ready to go, the next step should be easy! Well, not so fast. Have you reviewed the contract with the skip trace vendor recently? This needs to be reviewed to determine hidden costs. For example, what does the contract say about “put backs?” These are the files where the information provided by the vendor cannot be utilized. An example might be if there was a bankruptcy on a particular file or where a consumer is no longer employed. In these instances, the vendor may return the skip trace costs to you. Depending on your volume, these hidden costs may become significant.

Another aspect of the contract is the manner in which you are charged for information received. Is it no hit no fee or do you get charged a certain amount for hits and a lesser amount for others?

What about the nature of the data you send to and receive from the vendor? In simple terms, how much work does your

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Initials

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Legal Collection Advisor Fred N. Blitt

staff need to do to send the files to the vendor and how much work does staff need to do to append the information to each file? As you begin a relationship with a vendor, be sure you work through this process as it could be a source of increased time and expense.

The cost of evaluating the vendor is also a key element in your process. This needs to be detailed at the beginning of the process. You need to determine the type of account, client, balance, and location of the account prior to sending to a vendor.

One of the first questions you and your team need to determine is what files are you going to send to the particular vendor. The answer to this question generally exists within a sub-process of evaluating your vendors. Detailing the decision making process for file submission will help you evaluate your vendor in the future. Let’s assume we are looking at place of employment vendors for purposes of this discussion. In my experience, most people gravitate to the least expensive vendors. While that is understandable, I often ask the question about why we are not using more expensive vendors.

Spending more up front on verified data increases the likelihood of a positive result without adding to the hidden costs in the form of multiple filings, multiple processing, and multiple attorney reviews. The benefit to faster liquidation becomes the expected result. Analyze the cost per hit, contingency fee rates percentage, and the balances sent to see the results.

This area of skip tracing for collection law firms has been taking many turns over the past two years beyond sending files to the usual suspects of vendors. As you can see, there are a lot more hidden costs today than in years past.

Fred N. Blitt, Esq., is a partner with Blitt and Gaines, PC in Illinois and Couch, Conville and Blitt in Louisiana. He is past president of NARCA. Contact him at fred@blittandgaines.com.

March/April 2016

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AVOID MISTAKES WHEN PURCHASING INSURANCE AND BONDS

BY JOSHUA FLUEGEL

M

istakes made when purchasing insurance and bonds are often realized when it is too late to do much about it. It is therefore prudent to do the required research and ask the right questions before a purchase is made to make sure an agency’s main concerns are being addressed. These concerns seem to have increased in recent years due to volatility in the collection market according to Ben Johnson, director of risk management – insurance at Cornerstone Support. Johnson recommended a few key considerations when preparing to shop around for the appropriate insurance policy.

“I think it’s also important to look for what your tolerance is for a deductible; A.M. Best’s financial rating, and stability of the insurance carrier is also important Ben Johnson to consider,” said Johnson. “Every insurance policy is different so it’s important to read the fine print, read the exclusions and so forth.”

In addition, the cost of an insurance policy can seem cloudy. The cost needs to be considered at face value and at what it could be in the future.

“There is a distinction between insurance costs and price,” said Janis St. Martin, CIC, vice president of Collectors Insurance Agency.

“Insureds find themJanis St. Martin selves uninsured or underinsured; defense costs rise sharply due to a lack of defense expertise; and the biggest culprit, unchecked claims. If your claims aren’t reviewed by your provider on an annual basis for potential corrective measures, they will continue into the following year. In addition to the .com

March/April 2016

inevitable premium increase, each covered claim incurs a deductible and they add up fast. When we review loss runs for new insureds it’s evident their premium savings cost too much.”

An eye for detail is certainly required as a collection professional must be aware of what exactly a policy can and cannot do. Regulation-specific exclusions must be noted in particular.

“One of the first things you would look for in a policy form is any type of exclusion or limitation on the FDCPA, the FCRA, or TCPA,” said Johnson. “Secondly, I would encourage an insured to look at the class action limitations as well.

See if there are any sort of caps or amended deductibles on class action claims because that’s becoming increasingly common as well.”

While a situation where an agency is unhappy with a policy is common, insurance companies can also opt out of the renewal of a policy. However, a notice must be issued in advance.

“The E & O (errors and omissions) policy is usually a 12-month term and if the insurance company is going to choose not to offer renewal terms they’re required to notify you in advance so you have time to prepare and shop for other options,” said Johnson.

While claims are the main reason for an insurance provider to opt out of renewal, there is no exact magic number of claims or claim amounts that will cause the refusal of renewal.

“The insurance companies that have a better appetite for the collection industry tend to understand that there are going to be frequent claims in this class of business because of the way the FDCPA is written and the number of attorneys out there who specialize in suing debt collectors,” said Johnson. “There is a high

frequency of claims. It’s typically going to be the severity of the claims and the dollar amount that could result in premium increases or potentially a non-renewal notice at the end of the policy term.”

Bonding is another precaution that can make sure an unpleasant occurrence does not become a decisive moment in an agency’s history. Open communication can ensure success and possibly a better deal in this arena.

“I recommend being open to providing both corporate and personal financial information that the surety requests during the underwriting process,” said Joel Joel Blackburn Blackburn, senior bond analyst at Cornerstone Support. “The sureties reserve the right to request a range of information including corporate financials, personal financials, and even bank statements and investment summaries.

Many times this is not required, and simply signing the indemnity agreement is sufficient. But if requested, providing additional information can make the surety more comfortable with your account and help secure a better rate for your bonds.”

Keeping the growth and expansion of an agency in mind when bonding is essential. Measures taken to secure bonds one year may need to be enhanced the next in accordance with the agency’s activities.

“Most insurance agencies will have authority to place bonds without financial statements up to a certain bond aggregate,” said St. Martin. “As agencies expand their collection activity into new jurisdictions, they will need additional bonds. They will surpass this aggregate and trigger the financial statement requirement. If the agency is struggling, Continued on page 25

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Agency Spotlight

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Finding Skips By the Millions

BY JOSHUA FLUEGEL

here are multiple ways to track down a skip.

The method used hinges on the context of the skip tracing. In the case of an agency, millions of accounts pass through the digital door every year and many are a little iffy on the location of the consumer. Locating all of these consumers in the most streamlined method posDick Williams sible is the key to quick turnaround and maximized returns. To take a closer look at how today’s agencies are operating in this environment Collection Advisor shines the Agency Spotlight on Healthcare Financial Services and its president, Dick Williams. Williams reveals how HFS’ skip tracing process has evolved and what they have done to ensure a sound ROI. How did HFS come to be and describe its history with skip tracing? HFS started 23 years ago as a collection department of our parent hospital. Once we became a stand-alone collection agency for many clients we developed skip tracing processes. Over the years this included near-by books, reverse telephone directories and even individual phone books for every market we served.

We evolved to computer process and Google, Yellow Pages, White Pages, etc., to replace the library of paper directories.

a click away for our collectors. To that end we are an Ontario Systems user and capture credit bureau data with 21 individual attributes. We also capture business intelligence data for scoring along with scrubbing for cell phones, known litigators, probates, bankruptcies, and deceased debtors. We believe the front end loading of data speeds the quality and quantity of collections and reduces the need to perform after placement skip tracing. We also allow our representatives to use on line tools through TLO if necessary when front loaded data is not enough to reach a collection decision. We do not allow or expect our collectors to be on social media both from a production point of view and associated risks involved.

How have the CFPB and recent increases in regulation changed the way HFS finds consumers? Yes, in several ways the CFPB, and recent court cases have made us much more restrictive in our efforts.

Thus calling of relatives and or near-by contacts is almost nonexistent. HFS is running two dialers and very little of our calls go out over the auto dialing platform so most are generated by our representatives. Thus most of our work is very specifically directed to our vendor and client data as opposed to the old blanket calling campaigns of days past.

What kind of collections does HFS What is HFS’ most valued technoldo and describe the part skip tracogy in the recovery/skip tracing ing plays in the process. HFS is process? We are very happy 90% medical collections with about our business intelligence some student paper, governinformation coming from EHealthcare Financial Services’ collection floor ment, and utilities accounts.

Bureau and Intellitech. This Skip tracing is important as we have several markets. We have has enabled us to experience quality growth in collections. We developed internal databases to locate debtors but serving several can focus on cost effective treatments of accounts. Thereby we states dictated we develop a more useable process for access by improve client collections and provide clients with additional every collector. data about charity and recovery potential.

What is HFS’ philosophy when it comes to establishing and maintaining relationships related to skip tracing (vendor relations, informants)? Today we partner with excellent vendors who can automatically integrate into our database and provide quality information just

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What is an often overlooked but extremely important skip tracing/batch processing technique? I see two specific issues in dealing with skip tracing vendors and batches. The primary issue is the file out and recovery of the same must be in the background and automated. The second March/April 2016

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“We also capture business intelligence data for scoring along with scrubbing for cell phones, known litigators, probates, bankruptcies, and deceased debtors.” issue is results must be captured inside the individual account file and not require it to be gathered as a report and then transcribed onto the debtors account. Of course understanding the results, tracking the success of those results over time and costs is essential.

Likewise for years we have been participants in Operation Christmas Child. In addition we do training and speaking to Healthcare Financial Management Association, Medical Group Management Association, and CPA-type groups to increase understanding and awareness of our industry.

Describe a particular challenge regarding skip tracing/batch processing and What is one tip you would how did you overcome it? give agencies regarding We have tested numercollections/skip tracing in ous skip trace providers the current CFPB and regand asset search compaulation-rich environment? nies and as stated before, I believe we all need integration is critical. to keep current on the We rely on our business laws, court cases, and The HFS staff in support of a heart health benefit day. partner, Ontario, to be rulings to keep inside sure the chosen vendor can be linked into their system and to us. the lines and not risk ever making a bad decision or breaking We refuse to partner with vendors not able to work in that plat- the law. We need to resist the temptation to cut corners or alform as it has failed numerous times over the last several years. low our staff to stray from proper and compliant handling on every account.

What is one of the worst skip tracing-related mistakes an agency can make and how can it be avoided? Our experience has been to get much What do you like to do in your free time? Since we sponsor some golf data back from the vendor and feel it is a great partner. But over outings I try my best to play golf but have never been accused of time the quality of the data and or cost per hit can become pro- being a good golfer. I did win $5,000 in a putting contest so I hibitive. We monitor the quality of performance and the cost ver- guess that was the highlight of my golf. I enjoy movies with my sus return over at least six months before making any decisions bride of 26 years and travel when our schedules permit. w on contracts and long-term relationships.

How is HFS involved in the community? HFS like many of our fellow ACA members participates in several community-based events.

Being closely tied to the medical providers we do cancer, heart, and diabetes walks. We also sponsor golf outings for our city government, along with fund raising for kids’ summer camps.

Ten Questions...

Are you asking the right questions?

Find out at collectionadvisor.com/white-papers Williams (middle right) at an HFS-sponsored golf tournament benefiting scholarships. .com

March/April 2016

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PUZZLING WORLD OF REGULATION AND SKIP TRACING

BY JOSHUA FLUEGEL

T

he handling of a skip’s file has come a long way since the days of handling manila folders filled with crucial data. Today’s software has a way of conglomerating every odd piece of information into a format that can be used by today’s tracers. Given the current state of regulation today, the future of skip tracing software and its users will have to continue to evolve with the times.

“With the uncertainty of the regulatory landscape, companies will either continue with operations as usual or they will opt for a more innovative approach,” Chad Benson, president of LocateSmarter said. “Either way, make sure your skip tracing vendor works for you and can align with your strategies. It will be increasingly more important for skip tracing vendors to be able to customize their products to meet their clients’ demands.”

The fight to obtain the necessary pieces of the puzzle revealing the location of a skip is important but so is making sure the pieces are valid.

“The ARM industry continues to see increased regulatory oversight in the way we run our businesses (agencies, debt buyers, vendors),” John Schaeffer, CIO and general manager, at IDI John Schaeffer said. “From a skip tracing perspective, it’s critical to find skip tracing solutions that provide quality information, not just quantity. The costs of bad data can result in significant monetary and reputational exposure relating to FDCPA and TCPA lawsuits. When vetting your skip trace providers my advice would be to verify that they have the proper security certifications in place (PCI, HIPAA, FISMA,

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etc.) as well as confirm you are getting the highest quality data available.

“Bad data may subject someone who contacts a bankrupt client [to a lawsuit], and a TCPA problem for calling cell phones or contacting the wrong consumer. Every day there seems to be a new rule.”

While most data is valuable, some may cause trouble when regulation prevents its utility.

“When possible, avoid using regulated FCRA data like credit reports,” Darren Charest, president of US Tracers said. “This class of data requires end users to meet many guidelines with significant penalties in the event of an oversight.

There are instances where non-regulated data like proprietary place of employment (POE) can even outpace regulated data without all of the red tape, inquiries to credit reports, etc.”

Skip tracing software is a valuable asset, so is the vendor who supplies it. However, it is imperative that the vendor does not become a liability. Once accounts are handed over they are an extension of the agency in the government’s eyes.

“The most important components of skip tracing today are compliance, security, and performance,” Sheila Gabler, president and COO of VeriFacts said. “It is imperative that applicable regulatory laws are implemented and adhered to.

You are ultimately responsible for your vendor. You must be apprised as to the location and work steps of your accounts at every step of the process. Establishing a robust vetting process and performing onsite audits is key. It’s no longer sufficient to just produce a document on paper as to how something is being done…show them! When establishing performance

expectations be as clear and open as possible about processes and results.”

Once a vetting process is established, put it to work and take a look at multiple vendors as an agency cannot afford to be saddled with a partner that is not the perfect fit.

“Trying to guess what the newest regulatory change will be for the collections industry is like picking the winning numbers in the lottery,” Adam Schell, director at OneClick-Data said. “I think the best advice may just be, try to avoid getting stuck with any one service or one agreement for your information needs. Try to negotiate short-term agreements or make sure there is a way to terminate the agreement if the vendor is no longer able to provide the same level of service. Then make sure that you have other sources, services, and vendors that can help fill in the gaps in case a certain dataset or vendor is lost.”

The future of skip tracing will likely see more regulation requiring more flexibility from collection professionals.

Finding a suitable skip tracing product and corresponding vendor is fundamental for continued existence in this competitive industry.

SKIP TRACING SOFTWARE PRODUCTS Accurint for Collections CollectBOOST ID-Skip LocateSmarter POE, Banks, and Location Info Payroll Promise SPOT POE March/April 2016

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SKIP TRACING COMPARISON CHART PRODUCT

Accurint for Collections

CollectBOOST

ID-Skip

Banks, and LocateSmarter POE, Location Info Payroll Promise

SPOT POE

Company

LexisNexis Risk Solutions

US Tracers

IDI

Madison Wyatt LLC

MicroBilt Corporation

FEATURES

Accurint for Collections

CollectBOOST

ID-Skip

Analytics

No

Yes

Yes

Yes

Yes

Yes

Yes

Batch

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Online

Yes

Yes

Yes

No

No

No

Yes

Addresses

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Phones

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Asset info

Yes

Yes

Yes

No

Yes

Yes

Yes

Bankruptcy

Yes

Yes

Yes

Yes

Per Request

Yes

Yes

Real estate owned

Yes

Yes

Yes

No

No

Yes

Yes

Purchase date

Yes

Yes

Yes

No

No

No

Yes

Loan amount

Yes

Yes

Yes

No

No

No

Yes

Tax bill address

Yes

Yes

Yes

No

No

No

Yes

Cohabitants

Yes

Yes

Yes

No

No

No

Yes

Relatives

Yes

Yes

Yes

No

No

No

Yes

Neighbors/nearbys

Yes

Yes

Yes

No

No

No

Yes

Known associates

Yes

Yes

Yes

No

No

No

Yes

Wireless phones

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Alternative phones

Yes

Yes

Yes

Yes

Yes

Yes

Yes

BUSINESS TIES

Workplace Locator

CollectBOOST

ID-Skip

Officers

Yes

Yes

Yes

No

No

No

Yes

Employees

Yes

Yes

Yes

No

No

No

No

Co-workers

Yes

Yes

Yes

No

No

No

No

SSN

Yes

Yes

Yes

No

Yes

Yes

Yes

DOB

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Place of employment

Yes

Yes

Yes

Yes

Yes

Yes

Yes

FUNCTIONALITY

Workplace Locator

CollectBOOST

ID-Skip

Account monitoring

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Daily updates

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Recovery reporting

No

Yes

Yes

No

No

Yes

Yes

Encryption

Yes

Yes

Yes

Yes

Yes

Yes

Yes

OTHER

Workplace Locator

CollectBOOST

ID-Skip

Training

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Consulting

Yes

Yes

Yes

Yes

Yes

Yes

Yes

24-hour service

Yes

Yes

Yes

Yes

Yes

Yes

Yes

OneClick-Data

VeriFacts

Banks, and LocateSmarter POE, Location Info Payroll Promise

Banks, and LocateSmarter POE, Location Info Payroll Promise

Banks, and LocateSmarter POE, Location Info Payroll Promise

Banks, and LocateSmarter POE, Location Info Payroll Promise

SPOT POE

SPOT POE

SPOT POE

SPOT POE

Information on this table is derived from information posted on the Internet and direct questions. The company is the ultimate source and should be contacted directly.

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March/April 2016

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MORE ONLINE

Skip Tracing Software Checklist

CHECKLISTS & TRAINING TOOLS

he following is a checklist collection professionals can use to help objectively determine which skip tracing collection solution to select. Agency decision makers (evaluators) rank each one of the listed features on a scale from 1 to 5 in their respective column based on the feature’s importance to the agency (1 being least important and 5 being essential). Then in the “Software Possesses Functionality” column, decision makers can check off whether or not each feature is possessed by various prospective collection solutions.

T Features

EV

A

A LU

R TO

1 EV

A

A LU

R TO

2 EV

A

A LU

R TO

3

ITY RE ES NAL A W SS O FT SE TI SO POS UNC F

BUDGET: _________________ DATE OF RE-EVALUATION: ________ DECISION MAKERS: ______________________________________

Analytics Batch Online Addresses Phones Asset info Bankruptcy Real estate owned Purchase date Loan amount Tax bill address Cohabitants Relatives Neighbors/nearbys Known associates Wireless phones

Business Ties

Officers Employees Co-workers SSN DOB Place of Employment

Functionality

Account monitoring Daily updates Recovery reporting Encryption Ability to manipulate acquired data Can segregate data based on date acquired

Other

Alternative phones

Training Consulting 24 hour support service

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March/April 2016

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12 BENEFITS OF CALL RECORDING

BY T. STEEL ROSE

M

any collection agencies and first party collectors record calls to ensure quality and compliance. Another goal is to improve performance and defend against frivolous lawsuits. Call recording also provides proof of regulatory and contractual compliance. While not a magical device that spins hard data into gold, it can create a lift in promises to pay, a reduction in operating costs, improved quality scores, and increase management productivity.

While at any phase of the collections cycle managers can intervene in real-time, it is the training based on the calls that can increase promise to pay commitments and dollars collected. Quality scores improve with collector interactions by expediting call resolution and decreasing talk and wrapping up the call time. Average handling time (AHT), the average amount of time collectors spend on the phone with a particular debtor, is measured in minutes or seconds. Typically AHT begins the moment the debtor initiates the call and includes talk time, hold time, and time to complete all tasks related to recording the call details. AHT is calculated as the sum of the total talk time, total hold time, total after-call wrap time, divided by total number of calls handled. Efficiency on each call will improve top collector times and in turn average dollars collected.

Once the calls are analyzed, you can find ways to eliminate wasted time due to a number of factors: 1. C all scripts can be evaluated for long openings, showing empathy, paraphrasing, and closing lines.

2. Possibly decrease debtor arguments.

3. Analyze irrelevant probing and questions not pertaining to the issue. .com

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4. Determine if the debtor interrupts before all the required information is given at a single instance.

You can obtain answers to the following questions: 1. What is the benefit of the repetition of collector queries?

2. Does asking the same question repeatedly improve results?

3. How much dead air is there on a call?

Does this waiting improve performance?

4. How much time is spent on hold?

5. How much time is spent transferring?

6. Is debtor validation done even when not required?

7. Is multitasking in terms of using the computer and talking to the debtor at the same time helping?

8. Is time spent searching the system for information impacting performance?

Debt collection is heavily regulated and highly dependent on phone-based communications. There is a need to make sure collectors are following all the laws in addition to the regulatory compliance and liability protection. A supervisor can pick out calls that represent the best way of handling debtors. These model recordings can then be used as a training tool for other collectors. Collectors can also review and critique each other’s calls. This can be made easier as any call recording can be pulled up, whether it is to or from a specific debtor, and communicated via email as a WAV file.

The basic idea of call recording spills over into the visual medium as screen capture options enable an agent’s desktop activity to be recorded at the same time

the call is being recorded. Watching the screen activity while reviewing the voice conversation allows the supervisor to determine the productivity levels of the agent and training needs.

As volumes of call recordings increase, the ability to search through them becomes more valuable. Recorded calls can be tracked based on client ID or debtor file within the collection software.

Recordings can also be searched in order to locate defined sets of words or phrases for compliance efforts. Locating keywords and phrases may sound straightforward, but speech analytics must also account for the colloquialisms of various dialects or specialized industry vernacular. After listening to hundreds of actual calls from start to finish, you can begin to identify the meaningful key words and phrases.

The capabilities of call recording are far reaching and deserve a great deal of research. Work with your collection team and generate a specific list of agency requirements before embarking on the journey to acquiring a call recording solution.

CALL RECORDING SOFTWARE PRODUCTS Castel Tracker Contact Savvy SonicView Call Recording TCN Platform 3.0 Tracer UltimateContacts 23

HOW TO AVOID LAWSUITS

BY JOSHUA FLUEGEL

H

aving your agency sued is one of the most costly single events that can occur.

To make the sting even worse, it can be triggered by the mere uttering of a poorly selected phrase or Jack Gordon even word. One way to avoiding this and other legal incursions is to focus on the source from which the majority of lawsuits emit. Jack Gordon, CEO of WebRecon, spends his days accumulating and observing this information and attributes lawsuits to the most active attorneys.

Top 10 Most Active Attorneys of 2015

By Consumers Represented 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Todd M. Friedman Craig B. Sanders Sergei Lemberg David H. Krieger Suren N. Weerasuriya Craig Thor Kimmel Adrian Robert Bacon Mohammed Omar Badwan Daniel A. Edelman Amy Lynn Bennecoff Ginsburg

“One thing you can do is be aware of the names on that list,” said Gordon. “Make sure that every collector that is talking to a consumer has a copy of those names.

When any of those names from that list are mentioned, that’s a red flag. Not that that’s necessarily a very common thing to happen but boy, I’ll tell you, if going back and reviewing the recording from a lawsuit, if I was dealing with someone who had a Sergei Lemberg come up in the call and that didn’t trigger any kind of

24

management action or review, that would be a really frustrating one. That would have been one that could have been foreseen if not prevented.”

Training to avoid infractions under such attack is imperative. The best defense is teaching collection professionals the signs of calls meant to bait them into illegal territory. Such a sign is the consumer sounding like he/she is on a speakerphone. A speakerphone would allow a consumer to record the call or share the conversation with their attorney. Collection attorneys have advised collection professionals to hang up or pass the call to a seasoned professional if it is suspected that this tactic is in practice.

Many infractions leading to lawsuits are also fairly common and ones the CFPB has been working to prevent.

“Setting aside the biggest cause of consumer lawsuits being aggressive consumer attorneys marketing their services and recruiting clients, the data [collected

by WebRecon] actually shows that false and misleading representation involving the a.) character or amount of the debt, b.) methods used to collect them, c.) threats to take actions that cannot legally be taken are big areas,” said Gordon.

Such a litigious environment can create an uneasy feeling. However, the use of strategically implemented software can help ease the burden and keep collection professionals on the right path in the occasional absence of human guidance.

Courtroom proceedings can be more positive for an agency if the proper electronic records are maintained. Gordon recommended software features that could help.

“There are two that come to mind,” said Gordon. “One of them is call recording. That’s gone from a luxury to a necessity. The ability to confirm or rebut consumer allegations I think is definitely a

necessity. Even when the agency is in the wrong it would certainly expedite the process of settling suits and getting them out of the way. Another one is call analytics where you can analyze recordings automatically and then have those analytics identify potential problems. Maybe someone forgot to say the mini-Miranda or voices got raised, tensions were high, key words were used. Analytics are able to identify not only potential violations but tension or poor handling of a call and then can systematically address those violations.”

Being aware of where the danger lies and implementing the correct training will help keep your agency out of one of the top ten courts illustrated in the chart where the most consumer lawsuits were filed.

Top 10 District Courts of 2015

By Lawsuits Filed 939 671 612 497 379 316 288 275 247 215

Illinois Northern - Chicago New York Eastern - Brooklyn Pennsylvania Eastern – Philadelphia California Central – Los Angeles Florida Middle – Tampa New Jersey – Newark New York Eastern – Central Islip California Southern – San Diego Georgia Northern – Atlanta Nevada – Las Vegas

All statistics are gathered by Web Recon. This and more is available at dev.webrecon.com/category/fdcpa-casestatistics/.

March/April 2016

.com

U.S. INDEBTED TO THIRD-PARTY DEBT COLLECTORS

R

esearch shows the U.S. economy depends on $44.9 billion returned to creditors by third party debt collectors. This provides an average savings of $389 per American household.

Debt collectors provide a degree of security to lenders by assisting consumers with payment plans enabling credit granting to low-income consumers.

Debt collectors play a critical yet often unsung role in a healthy U.S. economy.

Consumers, creditors, and the economy as a whole benefit from the existence of the professional debt collection industry, according to the newest white paper from ACA International.

The white paper “The Role of Third-Party Debt Collection in the U.S.

Economy” explores the industry’s role in the U.S. economy. Third-party debt collectors work in tandem with creditors and consumers to ensure much-needed credit is widely accessible.

Debt collectors can help consumers with practical payment resolution plans.

“There is often the opportunity to negotiate the total outstanding balance, pay a discounted price on the initial balance, or develop a payment plan with the debt collector as a mediator,” the white paper states.

The debt collection profession supports consumers by sustaining an environment where lenders can make credit available and affordable to more people.

Lenders decide to make credit available

based on a risk calculation factoring in a consumer’s ability to repay. If creditors decide a consumer is “high risk,” they may charge prohibitively high interest rates or deny that person credit altogether. Working with third-party debt collectors, “provides a degree of security for lenders and a mechanism for them to mitigate losses,” according to the white paper.

“The credit-based economy as we know it could not exist without third-party debt collectors,” said ACA International CEO Pat Morris. “Debt collectors act as a crucial bridge between creditors and consumers, helping consumers take control of their finances and helping ensure that creditors can provide more credit to the people who need it.”

Avoiding Mistakes with Insurance And Bonds

decrease the amount of trouble in the whole process but help an agency elimi-

nate the concern of a dreaded notice of non-renewal.

Continued from page 17 additional bonding becomes a challenge. Collection agencies should proactively consider their bonds when making business decisions that may impact their financial position.”

There are alternatives to bonds but they should be closely examined and carefully considered as they may not function the same way and leave an agency vulnerable at an inopportune time.

“Placing an Irrevocable Letter of Credit (ILOC) in lieu of a bond should be considered an absolute last ditch option,” said Blackburn. “There are many surety companies out there, standard market and non-standard market, that are able to write bonds, even if your company is going through a hard time financially. Paying a higher premium rate for bonds is still much better than having your company’s capital tied up in an ILOC. The liability tied up in a bond does not necessarily end with the cancellation of a bond, which means that if you have an ILOC, your capital could still be held for years by the surety company after the bond has been cancelled.”

Adequate preparation to be insured and bonded can make the process easier and less costly. However, ensuring compliance on the front end will not only .com

March/April 2016

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Continued from page 26

March/April 2016 Volume 16, No. 2

LocateSmarter Batch & Online Skip Tracing Platform Advanced Payment locatesmarter.com Systems

info@locatesmarter.com Credit Card & Check 888-254-5501 Processing Merchant Services LocateSmarter is data provider focused on innovation apsofga.com and data quality. LocateSmarter offers skiptracing jennifer@apsofga.com products such as phone append, bankruptcy, deceased, 800-482-4561 cell phone scrubs and more.

APS provides a full range of electronic payment

Editor T. Steel Rose, CPA, ACG editor@collectionadvisor.com

MicroBilt MicroBilt Collections Suite microbilt.com 800-884-4747 MicroBilt is the leading data provider for collections, EFT Network, Inc. skip tracing and provides multiple alternative and TxTaCheck collections-specific credit reports, as well as bank eftnetwork.com account data.

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Advisory Board/Columnists Fred N. Blitt Ron Brown Debra Ciskey Sam Edens Sam Eidson Harry A. Strausser III

Electronic Payments

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EFT Network has launched the industry’s first electronic payment strategy that does not require underwriting or risk. Contact for more information about TxtaCheck.

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28

VeriFacts Payroll Promise verifactsinc.com sclark@verifactsinc.com 800-542-7434 Payroll Promise is designed to support a legal strategy by locating verified full time places of employment.

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MAY/JUNE 2016 Government Collections Features • A Look at New Phone Systems • What You Need to Collect Government Debt • Secrets to Municipal Collections • How to Succeed in Utility Collections Reviews • Small Office Collections • IVR Top 50 Collection Products

Managing Editor Joshua Fluegel josh@collectionadvisor.com Copy Editor Myrna Nelson

Publisher/Advertising Angie Rose angie@collectionadvisor.com Production Andrea Bergeron Paul andrea@collectionadvisor.com Subscription Changes Joshua Fluegel josh@collectionadvisor.com The opinions given by contributing authors are their own and not necessarily the opinion of our staff and ownership. All trademarks used are the property of their respective owner.

Collection Advisor (ISSN# 1556-0813) is produced six times a year by Abide Media, P.O. Box 92342, Southlake, TX 76092, 888-610-1144.

Standard Mail postage paid at Sussex, WI 53089. ©2016 All Rights Reserved Magazine Publishing Group, Inc. Printed in the U.S.A.

March/April 2016

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