Every year brings its challenges, but the past few have been especially turbulent for the collections industry. In quick succession, the COVID pandemic, spikes in inflation and interest rates, student debt forgiveness, and major regulatory changes including Regulation F and restrictions on the collection of medical debt have cumulatively made a large impact.
The changes have not all been bad for the collections industry – higher interest rates prompted a spike in delinquencies, for example – but first-party creditors and third-party collections agents alike have been forced to reexamine their operations and collections strategies. Blogs like this one have a role to play in that process, providing information on trends in the industry and the many ways they’re influenced (or enabled) by new technology. As 2025 approaches, it is helpful to look back at the four most-read articles here, and see what they tell us about the state of the industry and its preoccupations.
#4 Wish Your Debt Collection and Recovery Were More Effective? Spokeo for Business can Help
A familiar proverb says, “you need to spend money to make money.” For collections professionals, that holds true to a point, but it’s an imperfect paradigm. For any business, keeping costs low relative to revenues is crucial to profitability and long-term success. Maintaining that ratio of expenditure to returns requires your operations to be both effective – predictably resulting in recoveries – and efficient, meaning minimal expenditures of time, labor, and financial resources.
This article from March of 2024 addressed that near-universal desire for improved outcomes and reduced costs, and was one of our most-read blog posts of the year. It cites some of the thornier challenges faced by collections professionals in the current environment, including:
- Changing consumer behavior
- The limitations of the industry’s legacy data providers
- Financial and staffing constraints within the industry
In this article, we stake out a case for Spokeo for Business as a powerful tool to address these and many other challenges, citing a number of specific abilities and corresponding use cases in collections and skip tracing. The product’s speed and power, its simple and intuitive interface, and its integration of regulated and unregulated data all stand out among comparable tools. The article can be thought of as a conceptual base underpinning a lot of the other information we present here, so it’s a good starting point if you’re new to the blog.
#3 Skip Tracing and Collections: How to Harness Social Media Data Effectively
Right-party contacts are a key performance indicator within the collections industry. No collection strategy can work, and no recovery can be made, until and unless up-to-date contact information for the debtor can be located. While legacy data providers offer high-quality information, the data’s financial-industry roots are an inherent limitation. Large numbers of Americans are unbanked or underbanked, and many more may – deliberately or through genuine oversight – fail to update their information with creditors after moving.
Skip tracing, then, plays a large role in collections efforts, and social media holds tremendous promise as a tool for skip tracing. The same debtors who absent-mindedly or deliberately neglect to update their information with banks or other creditors may post on social platforms many times each day, or even within a given hour. The issue is that social media, collectively, represents a dauntingly huge and chaotic sea of random and unverified information. Turning that chaos into actionable intelligence is a significant challenge.
This post from May of 2024 takes a closer look at those challenges, and why Spokeo for Business – with its decades-deep expertise in social media – is a powerful tool for turning social media’s potential into tangible, actionable, verifiable data. For collections professionals seeking to harness social media’s power, it also outlines a set of best practices for the use of that data, with a focus on the ethical and compliance issues that can arise from the use of social media data.
#2 Using Social Media to Drive Debtor Engagement
Locating a debtor, while important, is fundamentally only a preliminary step. For the process to work as intended, it’s still necessary to establish contact with the debtor and – most importantly – for the debtor to engage with the collections process.
That’s the focus of this September 2024 article; which specifically explores the ways in which collections professionals can use social media to drive engagement. Private messaging on the debtor’s platform of choice, for example, may prove to be their preferred communications channel. Locating their online profiles also provides savvy collections agents with an insight into who debtors are as individuals, including their personalities, interests, and life events. That empowers a more empathetic, customer-centric approach to collections, a trend that we believe will loom large in 2025.
An underappreciated aspect of social media is that it provides a forum for third-party collections firms to interact with the public, and humanize the industry as a whole. Deliberately crafting your social media presence around financial advice, budgeting, and sound money-management practices can help position your firm as a consumer-centric operation, differentiating yourself from rivals and distancing your company from the industry’s traditionally adversarial approach.
#1 Navigating the Digital Shift: How Social Media is Revolutionizing Skip Tracing and Collections
The top-performing article of 2024 dates from the very beginning of the year, and serves as a statement of intent for much of the rest of the year’s collections-centric content. This is a relatively brief post, summarizing the ways that social media can be leveraged to streamline your collections process and make it more efficient.
Think of it as a discussion starter, an opportunity to think about what’s working in your current collections process and how technology (and specifically social media intelligence) might improve those things that aren’t.
Helping You Navigate Change
There’s no denying that the past few years have been uncommonly chaotic for the collections industry. It’s possible that 2025 may offer more stability than the decade has so far shown, or it may instead bring further change.
However 2025 and successive years play out, intelligent use of new technologies and new data sources, like Spokeo for Business, can help weather those storms and thrive despite whatever headwinds you face. As new trends and opportunities arise, the team here at Pathfinder will work hard to keep you informed on how they affect your operations and how you can best take advantage of them.
If we haven’t yet addressed a specific challenge that faces your own firm, please reach out to our team using the contact information on our Skip Tracing and Collections page. They’ll be happy to answer any questions you may have about our product and its uses in collections. They can also arrange a demonstration of Spokeo for Business, or set up a no-cost trial so you can evaluate it directly. Whatever changes may come, we’re here to help you face them.
Sources
Consumer Financial Protection Bureau: 12 CFR Part 1006 – Fair Debt Collection Practices Act (Regulation F)
Consumer Financial Protection Bureau: Recent Changes in Medical Collections on Consumer Credit Records
Key Differences: Difference Between Efficiency and Effectiveness
Thomson Reuters: Five KPIs For the Collections Department
McKinsey & Co: Holistic Customer Assistance Through Digital-First Collections