Skip Tracing Automation - Part I

Is your collections staff working as efficiently as possible?

November 10, 2018 

Part I in a series of three blog posts during UsedCarWeek regarding skip tracing

At the Auto Finance Intelligence Summit (AIS) this past July, masterQueue hosted a meeting with several of our first party lending clients to discuss building more efficient and more compliant contact management strategies within masterQueue.

 The goal of the meeting was to discuss current skip tracing strategies and ideas to improve practices as we move into 2019. The overwhelming request for follow up information centered around Skip Tracing Automation and Skip Tracing Process Management. We will dive into this at our annual user conference at Used Car Week on Wednesday November 14th from 2-4pm, and this post begins the process of sharing what we’re learning and the progress we’re making.

Specifically, at AIS we heard these challenges:

“I walk the collection floor and hear silence.”

 “I know the collectors are working our toughest accounts, but why are they not making phone calls.”

 “They’re buried in web sites looking for data and it’s impossible to track their productivity.”

“We’re buying the same data over, and over, and over again.”

“I don’t have a good way to track what data we’re buying, why are we buying it, and what are the results?”

 “We have no documented and trackable skip tracing process.” 

 “I know we’re not as productive as we could be, and I have no measurable.”

 “We know the number of how many accounts charge off with no contact may be as high as 50%, as are the number of no contact repossessions, but we don’t know the actual number nor do we have an easy way to measure or address it.”

 The meeting at AIS was moderated by Ed Falco from Auriemma Consulting Group. We invited Ed, and Luigi Condina, also from Auriemma as they are one of the most recognized and respected niche providers of advisory consulting services to the Payments and Lending industries. This meeting was the beginning of a process to study skip tracing and its effect on collections and repossession and how do lenders approach skip tracing, and specifically can skip tracing be fully, or at least partially automated?

We also asked the question “Is it still skip tracing, or can the first steps of the process be reconsidered as more of a defined, step by step contact management process?”

Luigi Condina, Senior Manager in the Auto Finance vertical at Auriemma had this to say following the AIS meeting, and after an in depth skip tracing survey was conducted by Auriemma:

“Lenders are navigating an environment where a number of factors make it increasingly difficult to contact delinquent customers. Call blocking technologies and regulatory limits on call intensity present a few tangible roadblocks." Luigi Condina, Auriemma

Earlier that day at one of the AIS sessions, Mark Tuggle, the Collections and Recovery Operations Executive at BBVA stated that he believes Skip Tracing has become more of a data management process than the traditional process we have come to know as Skip Tracing over the past few decades. The masterQueue users in the room agreed that at least for the first few steps, it really can be broken down to a data management process. We will be reviewing what we've learned since AIS this coming Wednesday at UCW as we took that as a take away from AIS to rebuild our callQueue product within masterQueue. The goal was to automate the first few steps of the contact process. We do this by simply automating the Gathering and Organizing of the data; i.e. the phone numbers to call to locate the lost customer. By connecting dozens of data providers through real-time API connections into masterQueue, including Equifax, Experian, TU, Lexis-Nexis, Innovis, Enformion, WhitePages, Carfax, DRN, TLO, Clear and at least a dozen others, we save all that wasted time looking for and analyzing data every skip tracer worth his salt knows needs to be gathered and called.

The results, as described in a white paper we published in October 2018, have been more than positive. The first beta user of the new callQueue had this to say after a month using the new features we built after the AIS meeting:

“With the callQueue, we have five FTE’s doing the work it used to take eight FTE’s to accomplish, and at a lower data cost!”

-Nikki Manger, Vice President of Loan Servicing at SAFCO  

One of the reasons for this level of technological productivity is the full automation of the gathering of multiple phone numbers from multiple data providers to make manual, non-dialer calls in the callQueue. This simplifies the process of attempting contact with the no contact customer. In a nutshell, this data automation replaces time spent manually looking for data, which gives collectors more time to make more phone calls. The automation also allows compliance rules to be dynamically added on the fly to phone numbers as they’re gathered. Most importantly, this prevents repeat calls to customers, or people associated with the no contact customer.

The key here is having a full understanding of FDCPA rule 804, and using that as part of your no contact strategy. This rule designed to help lenders locate No Contact customers clearly states a lender (or its service providers) are only allowed to contact third parties, for location purposes, one time during the life of the loan. Due to lenders allowing their customer data and 3rd party vendors to populate so many systems, its almost impossible to manage this, unless you use a system like masterQueue. This is one of the most violated compliance rules out there, and a main reason why if you have multiple people using data and phone calls to locate customers, which is still the most effective process btw, you should be attending our user conference at UsedCarWeek this Wednesday from 2-4pm. 

Part II of this blog will be posted after the "Collections eats Strategy for Breakfast and SKIPS lunch" UsedCarWeek session Monday 11/12 at 130pm with masterQueue's new Operational Strategist Bill Ploog, Doug Ekizian who is the Managing Director at one of masterQueue's strategic partners Price Waterhouse Coopers, and with moderation from one of the more passionate people we know regarding data, analytics and AI; Joel Kennedy COO of TruDecision. Safe travels to Scottsdale everyone.