In this article, we\u2019ll examine where, exactly, legacy providers fall short and how new skip tracing software can help bridge those gaps. <\/p>\n\n\n\n
The Shifting Sands of Consumer Data<\/h2>\n\n\n\n
The sources legacy data brokers have traditionally drawn upon\u2014namely, banks and credit reporting agencies\u2014served them well for decades. Data from these sources was authoritative and well-verified, and brokerages packaging the data for use by the collections industry (and others) offered a valuable service by collating and cross-referencing this information. <\/p>\n\n\n\n
However, consumer behavior and the corresponding changes in the collections industry\u2019s needs have eroded legacy providers\u2019 usefulness. Here are a few of the biggest blows to traditional collections data:<\/p>\n\n\n\n
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- Recent data, analyzed by the US Chamber of Commerce, indicates that over 70% of Americans now rely entirely on cellular phones<\/a>, with just over 1 in 4 still having a landline phone. Adults over 65 are the only demographic bloc where landline phones retain even 50% of the market share, but seniors account for a relatively small proportion of delinquent debt<\/a>.\u00a0<\/li>\n\n\n\n
- Millennials and Generation Z (those under 40), who account for the largest portion of seriously delinquent debt, are also the most likely to move in any given year<\/a>, according to federal census data. Younger adults are also likely to live in shared accommodations, either with family members or in non-family living arrangements<\/a>, which makes their physical addresses opaque to traditional data sources.\u00a0<\/li>\n\n\n\n
- The FDIC\u2019s most recent survey of the unbanked and underbanked<\/a> showed that these categories (at 4.2% and 14.2% percent respectively) accounted for 24.6 million households.\u00a0<\/li>\n\n\n\n
- A recent study by the McKinsey Company showed that 36% of Americans identified as independent workers<\/a>, a category which includes contract, temporary, and freelance workers as well as those engaged in the so-called \u201cgig\u201d economy.\u00a0<\/li>\n<\/ul>\n\n\n\n
Collectively, these trends illustrate the difficulties of legacy data providers to supply accurate information to the collections industry that depends on them. <\/p>\n\n\n\n
The unbanked and underbanked, and the more than 1 in 3 American workers who rely on gig, contract, and freelancing work, are poorly represented in traditional financial-industry data sources. Frequent moves and unconventional housing scenarios undermine the legacy providers\u2019 ability to provide accurate mailing addresses. Finally, the shift away from relatively stable and available landline phone numbers to cellular phone numbers has undercut legacy brokers\u2019 ability to furnish up-to-date contact information. <\/p>\n\n\n\n
Supporting Digital Debt Collection<\/h2>\n\n\n\n
The industry as a whole remains heavily entrenched in the use of telephone calls and hardcopy letters as collections tools. Respondents to TransUnion\u2019s 2024 Debt Collection Industry Annual Report<\/a> overwhelmingly still use both, with calls and letters being used by 86% and 87% of firms, respectively. However, electronic communications channels are on the rise. Email is now used by 74% of firms for communication with debtors, an increase of 6% year over year, and 45% of respondents now use SMS text messaging.\u00a0<\/p>\n\n\n\n
This shift in favor of digital debt collection is not unexpected. Contemporary consumers are heavily online, communicating and conducting their lives with smartphones and other mobile devices. Especially among younger demographics, there\u2019s a strong consumer expectation that they\u2019ll transact most of their financial affairs online first. That has powerful implications for the collections industry: Even before the COVID pandemic drove more and older consumers online, research by McKinsey showed increased returns when debtors were contacted through their preferred channel<\/a>.\u00a0<\/p>\n\n\n\n
There are compelling arguments for switching to a digital-first collections process<\/a>, which can be summarized briefly as higher return rates, reduced friction for debtors, and greater efficiency for collections agents. These contribute to improved ROI, and can help mitigate the perennial staffing issues that dog the industry (86% of respondents to TransUnion\u2019s survey stated that hiring collections agents was \u201cSomewhat\u201d to \u201cExtremely\u201d challenging; and 81% said the same of retention). However, gaps in the data provided by legacy vendors affect precisely the kinds of information needed to support these efforts by the industry.\u00a0<\/p>\n\n\n\n
![\"collections](\"https:\/\/www.spokeo.com\/pathfinder\/wp-content\/uploads\/2025\/09\/pexels-linkedin-7245921-1024x683.jpg\")
<\/figure>\n\n\n\nThe Case for New Software Tools<\/h2>\n\n\n\n
The new online economy poses both a challenge and an opportunity for the collections industry. On one hand, as demonstrated above, it means that many consumers are ill-represented in the data sources used by legacy data vendors, and that data may be incomplete, inadequate, or outdated even for those who are well-represented. On the other hand, consumers\u2019 engagement with online platforms creates substantial streams of new data for those who are positioned to aggregate and verify it, and harness it into a useful product. <\/p>\n\n\n\n
It\u2019s important to note, in fairness, that the established data providers are responding to these challenges by \u201cbolting on\u201d additional tools to their existing products, often as a premium-tier upgrade to what is already a significant subscription fee. This additional data may or may not be well-integrated into the remainder of the product, or easily adapted to your own firm\u2019s in-house software stack and customizations, due to the workarounds needed to make it play nicely with legacy code and the vendor\u2019s established Application Programming Interface (API). <\/p>\n\n\n\n
For many debt collection firms, it may make better sense to settle on a new software product, designed from the ground up specifically to capture the kinds of data that legacy providers struggle with. These include cellular phone numbers, email addresses, social media accounts, and physical addresses that result from unconventional living arrangements. Verifying and furnishing those requires specialized expertise and new data sources. <\/p>\n\n\n\n
Skip Tracing Tools That Work Now<\/h2>\n\n\n\n
These new software tools can be thought of \u2014 and used \u2014 as a primary data source, a data verification resource, or a skip tracing tool. Spokeo for Business provides a leading example of a modern data-aggregation search product. <\/p>\n\n\n\n
Among its leading characteristics, it provides: <\/p>\n\n\n\n
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- A combination of public and regulated data<\/strong> spanning thousands of sources, providing billions of data points on residents of the US. <\/li>\n\n\n\n
- Unmatched depth and breadth of social media intelligence<\/strong>. Spokeo was originally launched nearly two decades ago as a social media aggregator, and it retains its leadership in that segment. At the time of writing, Spokeo for Business searches well over 120 social platforms. <\/li>\n\n\n\n
- Tight integration between regulated and non-regulated data<\/strong>, so both can be searched from a single query and combined in a single report. <\/li>\n\n\n\n
- The ability to connect an individual debtor to multiple phone numbers<\/strong> and email addresses, and to indicate which is likeliest to be the most used.<\/li>\n\n\n\n
- Connections between the debtor you\u2019re searching for and probable family members<\/strong> who can often help you make contact (and may also be housing the debtor in an informal living arrangement). <\/li>\n\n\n\n
- Powerful APIs<\/strong>, so agencies with in-house or contracted IT talent can easily integrate it with the remainder of their software stack, including legacy data products and (crucially) powerful analytics tools. <\/li>\n\n\n\n
- Batch search functionality<\/strong><\/a>, so even small agencies without meaningful IT services can use Spokeo for Business to update and verify the data received from legacy providers, as well as compensate for gaps in the data (as discussed above).\u00a0<\/li>\n<\/ul>\n\n\n\n
Addressing the Gaps In Your Data <\/h2>\n\n\n\n
Any critique of a product or service that comes from a direct competitor inevitably will (and should be) viewed with caution. Nevertheless, results of a recent industry survey commissioned by Spokeo identified a number of areas in which our respondents reported concerns about the quality of the data they were receiving from their vendors, and their return on their data expenditures. <\/p>\n\n\n\n
It\u2019s a useful exercise, if you haven\u2019t done so recently, to evaluate your data strategy<\/a> and assess\u00a0<\/p>\n\n\n\n
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- Whether your current data partners are capable of supporting that strategy, and,<\/li>\n\n\n\n
- What ROI you\u2019re getting from your data expenditures. <\/li>\n<\/ol>\n\n\n\n
If the results of that evaluation reveal that your current partners aren\u2019t meeting your immediate and planned needs, it may be time to seek out new skip tracing tools that can either fill in the gaps or provide a higher-return alternative to your incumbent vendors. <\/p>\n\n\n\n
For many agencies, from the smallest to the largest, Spokeo for Business may be the most powerful and cost-effective alternative. For further information about the product and its capabilities, to set up a demonstration, or to arrange a no-cost hands-on trial of Spokeo For Business, reach out to our team through the contact information on our Collections and Skip Tracing<\/a> page.\u00a0<\/p>\n\n\n\n
Sources<\/strong><\/p>\n\n\n\n
Chamber of Commerce: Data Reveals Landline Phone Decline Statistics<\/a><\/p>\n\n\n\n
Federal Reserve Bank of New York: Quarterly Report on Household Debt and Credit, Q1 2025<\/a><\/p>\n\n\n\n
Census.gov<\/a>: Birth Cohort Geographic Mobility in the United States: 2005-2023<\/a><\/p>\n\n\n\n
Jeffers K, Esteve A, Batyra E. Non-family Living Arrangements Among Young Adults in the United States<\/a>. Eur J Popul. 2024 Mar 6;40(1):10. doi: 10.1007\/s10680-024-09696-5. PMID: 38446226; PMCID: PMC10917710.<\/p>\n\n\n\n
Federal Deposit Insurance Corporation: 2023 FDIC National Survey of Unbanked and Underbanked Households<\/a><\/p>\n\n\n\n
McKinsey & Company: Freelance Work, Side Hustles and Gigs: Many More Americans Have Become Independent Workers<\/a><\/p>\n\n\n\n
TransUnion: Debt Collection Industry Annual Report 2024<\/a><\/p>\n\n\n\n
- Unmatched depth and breadth of social media intelligence<\/strong>. Spokeo was originally launched nearly two decades ago as a social media aggregator, and it retains its leadership in that segment. At the time of writing, Spokeo for Business searches well over 120 social platforms. <\/li>\n\n\n\n
- Millennials and Generation Z (those under 40), who account for the largest portion of seriously delinquent debt, are also the most likely to move in any given year<\/a>, according to federal census data. Younger adults are also likely to live in shared accommodations, either with family members or in non-family living arrangements<\/a>, which makes their physical addresses opaque to traditional data sources.\u00a0<\/li>\n\n\n\n