Third-Party Contacts and the Impact on Skip TracingCollections Training Resource
September 2, 2013 — 3,500 views
One of the most effective ways to reach debtors who have skipped out on a debt is simply to call third-party contacts, including friends and family members, who are likely aware of the debtor's location. This is most effective when trying to locate intentional debtors, but it may also be useful when seeking out unintentional debtors in some cases. Friends and family members are often listed as references on larger loan applications and some credit applications, and they're sometimes used as co-signers for a buyer's car or a loan. In some cases, an authorized user on a past due or defaulted credit card may be available for contact.
Though this method is highly effective for unintentional debtors and a significant minority of intentional debtors as well, the process does garner a great deal of scrutiny under the Fair Debt Collection Practices Act. In fact, debtors most often run into legal problems and collection headaches by not following the FDCPA to a tee when making phone calls to third parties in search of debtors who are otherwise unavailable. As a reminder, the best practices for third party contact during a skip trace include the following:
1. Collection agents are allowed to contact each third party individual only one time for the purpose of collecting a debt or gaining more information about a debtor.
2. A collection agent calling a third party contact must identify himself or herself as a debt collector at the beginning of the phone call.
3. The collector is well within their rights to "confirm" the location of the debtor, but they are absolutely not permitted to disclose the debt owed, the amount owed, the defaulted or past due nature of the debt, or anything else relating to the financial status of the debtor himself or herself.
4. Collection agents are absolutely prohibited from making threats against not only the debtor, but also their third party references and contacts, in an attempt to collect the debt or confirm a debtor's location. Doing so can lead to serious and costly litigation.
5. Collectors are not permitted to lie to or deceive third party contacts in any way when they seek to confirm a debtor's location as part of a trace.
Staying within these guidelines is the best way to ensure that a trace will be effective, and that the practices used to begin or complete that trace will not result in a complaint being filed by the debtor, their friends and family members or an attorney representing any party contacted by the collection agency in the interest of performing a skip trace.