Collector - March 2020 - 32

DATA HYGIENE
Ensuring high-quality and current
consumer information is the first step,
but without the proper care, you will be
derailed before you've even begun.
Internal data may be inaccurate
or outdated due to human error and
misinformation (typos, incomplete
records, customer self-reporting, etc.) or
through data decay over a long period.
This is exacerbated by siloed, departmentfocused databases with inconsistent inputs,
such as a loan processed as "Robert Smith
Jr." versus a checking account as "Robert
A. Smith."
Today, problems are often caused by
misrepresented or incorrectly reported
consumer data, such as a consumer
providing a phone number and address
to a debt settlement company. This
information now becomes this consumer's
phone and address in your system of
record when, in fact, it is not.
While in theory, external or
supplemental data might be helpful, it can
sometimes be a hindrance, with too many
results to comb through and questionable
accuracy. Having poor data hygiene causes
major problems downstream, bringing
"contact and locate" to a halt while more
debt and fees accumulate. Delays damage
the customer experience and relationship.
Some collection departments invest in an
all-in-one system that combines banking,
originations and collections activities into
a single platform. However, we all know
that in the current environment, that is a
big ask. Today, we may have one system
for collections, another for skiptracing,
another for compliance management
and tracking and others for everything
else that needs managing in a modern
collections department.
With all of these disparate systems,
how do we ensure we have all the correct
consumer data in one place and that we
even have the correct consumer?
Your options are to either use an
integrated system or have excellent linking
logic and the ability to assign unique
identifiers to your consumers. The days

32

of only using a Social Security number
as your identifier are over as well. With
42% of the Social Security numbers issued
having two or more people associated with
them, that identifier is as unreliable as ever.
Best data hygiene practices include
running routing data quality checks,
pulling data from reputable sources, and
using strong linking technology to create
a system that works for both you and
your customers.

SCORING AND ANALYTICS
While highly useful for prioritizing and
strategizing collection efforts, many
organizations are not able to take full
advantage of scoring and analytics tools.
Smaller organizations rarely use any type
of scoring and analytics, even though
manual processes are time-consuming
and can lead to highly subjective
decisions. Companies that do employ
these tools may find their results poisoned
by bad data.
Anything less than vigilant data
hygiene will make scoring and analytics
futile. Misevaluation at this stage impedes
recovery. Other creditors might reach the
consumer first, or you may leave money on
the table by pursuing "dead ends" instead
of consumers who truly are willing and
able to pay. Inaccurate scoring creates
customer friction when it paints a false
picture leading to unnecessary/excessive
contact that damages the relationship.
An example of this was the removal
of tax liens and civil judgments from
credit reports. According to the National
Consumer Reporting Association, the
removal of liens and judgments would not
affect scoring or the credit worthiness
of a consumer. However, in reality we've
seen that the removal of judgments has
affected the industry's ability to get a true
picture of consumers' financial standing
and ability to repay debts. A LexisNexis
study found that consumers who were
approved for auto loans or credit cards
and had a lien or judgment on file
defaulted at a rate more than twice that of
the average consumer.

In short, knowing that a consumer has
either a lien or judgment means that they
are much more likely to default on their
loans. Unfortunately, credit reports no
longer contain this valuable information.
So, what options are available to you?
First, you should always scrub your
data before use. Beyond that, though,
supplement the data you have with
additional third-party data as needed to
enhance decisioning. While many smaller
organizations might think that scoring
and analytics tools are out of reach, you
may be surprised to know how costeffective they are.

CONTACT AND LOCATE
There is more to contact and locate
than just finding someone. Mistakes
at this stage can run you afoul of
regulations. Whether it's bad phone
numbers, old addresses or other missing
information, poor data quality not only
thwarts contact but may also put private
consumer information in the wrong
hands-a compliance violation. There
are also regulations that limit frequency
and time of contact-a huge problem for
larger organizations operating across
multiple states.
The legwork required to connect with
past-due account holders consumes
significant time and resources, even
more when skiptracing comes into play.
Consumers may "learn the game" and hide
from collectors, leaving you in the lurch.
You should make sure that you are
routinely and consistently cleansing and
enhancing your data, pulling from sources,
like phones, that provide alternative phone
numbers for a close relative (mother,
father, etc.), to help with skiptracing. It's
also important to look for different points
of contact, such as email addresses, place of
employment, phones and cell phones that
can receive text messages.

MITIGATION
While some organizations will skip
straight to litigation, others try to mitigate
the situation first. The consumer may have

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