What Is a Skip Account?
A skip account, sometimes called a “skip,” is a borrower who defaults on a loan, which can include bail bonds, and “skips town” to avoid repayment without providing a correct forwarding address. Skip tracers are collection agents hired by lenders and bail bondsmen to find skip accounts and collect the money owed on the account, or a promise to repay the debt in full.
Breaking Down Skip Account
Skip accounts are divided into two categories: intentional and unintentional. An intentional skip is someone who deliberately defaults on either a loan or a bail bond, then endeavors to obscure their whereabouts. An unintentional skip is someone who moves without remembering to alert the lender of the change of address. Either way, locating skip accounts is important for lenders who are stuck with bad debt. Tracing skip accounts used to involve a lot of “shoe leather” and “doorstepping,” meaning the process of walking around a town and knocking on doors of acquaintances and relatives of the missing debtor. Today, however, skip tracers spend most of their time in front of a computer screen, scouring online records. They look up telephone database records, job applications, criminal background checks, arrest and court proceedings including marriage and divorce records, property deeds, public tax information, credit card applications, and many other public records.
Privacy Laws Complicate Finding Skip Accounts
While the internet facilitates tracing skip accounts, the growing concern over Internet privacy also makes it harder to find some information. For example, most states no longer divulge information about individual driver’s licenses even though they are technically a matter of public record. The Telecommunications Consumer Protection Act (TCPA) limits robo-dialing and other invasive cold-calling techniques. And the wide availability of cheap “burner” cellphones makes it easy for intentional skip accounts to hide their phone usage. Skip tracers also cannot violate the collection rules established in the Fair Credit Reporting Act (FCRA), which protect consumers against undue harassment.
In the face of increased privacy restrictions, skip tracers and for-profit data providers now use more sophisticated tools for tracing skip accounts. These include predictive analytics, high-speed data monitoring, and other high-tech tracing systems. Sometimes, however, old-fashioned shoe leather and doorstepping still helps.
Skip accounts are dunned for payments due when they are located. Sometimes, the borrower also receives an arrest warrant or an order to appear before a judge in a civil proceeding.