Debt Recovery and Debt Collection Mis-trace issues

Mis-trace is one of the biggest issues for the Debtor Tracing, debt collections industry and for the debt buying industry, and recently the improvement in the accuracy of debt data has been championed by The Debt Buyers and Sellers Group (DBSG).

The Debt Buyers and Sellers Group which in turn is part of the Credit Services Association (CSA) has implemented new directives to improve the quality and reputation of firms operating in the debt sale and debt purchase industry and in addition to making debt agencies more accountable, it also brings the creditors (whom compile the data) into account for the first time.

Recently, an article in the The Telegraph, told of a story in which a man had been mis-traced. Astonishingly, even though the name and surname was the same, the man in the article had a different middle name, different address and was also 30 years younger than the actual debtor being traced. It also outlined the trouble he had had getting his name cleared.

The BBC has also reported on the mis-trace issue numerous times in the past few years, as has Watchdog, and each time the issue arises the public perception of the debt recoveries industry has taken a dent. The debt recovery, debt collection and debt purchase industries have done much to improve their images over recent years, and although the use of debtor tracing services has increased by 14 million cases per year between 2008 and 2010, the numbers of complaints regarding debtor mis-trace have not grown at anywhere near the same rate.

These growth figures highlight the opportunities in the debt tracing industry and related debt buying sector but the threats of mis-trace are still being addressed to tighten up the issue further.

Whilst the issue of debtor mis-trace is obviously distressing to those at the receiving end it also leads to increased costs to those in the debt industries that use debtor tracing services. As highlighted in the report by the Debt Buyers and Sellers Group (DBSG), the accountability will not now just sit with the debt agencies chasing the debt, but those companies that compile the data in the first place, i.e. the original creditor.

Previously debt agencies have (and sadly still are) engaged by third party creditors to chase debts which are based on incorrect or out of date information and when the file is returned back to the creditor; often with a recommendation to review the account/data, or drop the recovery altogether it has been known for creditors to either ignore the recommendation, or not have the systems in place to update their records to reflect the recommendation from the debt recovery agency.

The net result is that incorrect data, whether it be in relation to a debt that doesn’t exist (i.e. its already been satisfied) or in cases of a mis-trace, is not being taken into account when engaging debt collection and recovery agencies and what can often happen is that the file gets passed on from agency to agency, all of whom are unaware of their counterparts previous attempts and findings.

There will of course always be debtors who claim to have been the subject of mis-trace when in fact they are the true debtor. This is why it is vital to see trace cases in a succinct, complete and timely manner, thus allowing for quick judgements on the next steps to be taken.

Such steps will ensure that debtor tracing industry growth can be achieved and managed in such a way that mis-trace is prevented whist firms in the industry are not being adversely financially affected by extra costs.

Corporate Credit Debt Recovery (CCDR) is a leading UK Debt Recovery specialist with international reach and a client base of SME’s and multinational organisations. Our services include:  Debt Recovery, Debt Mediation & Debt Dispute Resolution, Business Reports and Debtor Tracing, Outsourced Credit Control and Corporate Legal Services.

For more details, call our Liverpool head office or use the Contact Us section of the site.

This entry was posted in Blog, Industry News