Facebook Makes Debt Collection Sweet for Creditors

James has been a serial debtor for the past four years.

Despite the intense pressure from his creditors; mostly commercial banks, he has managed to evade them and has never been bothered by the numerous calls from debt collectors.

He always uses the same strategy; soon after securing a loan, he changes his phone contacts, residential address and resigns from his job and he is confident of blocking all avenues of pursuit from debt collectors with this tactic.

After several attempts his creditors resolved to hire collection agencies for a trace and recovery effort. Several months of research revealed that James is an ardent user of Facebook. The creditors then got to work, with a cute debt collector named Doreen befriending him online.

Eventually, after chats and pokes, Doreen traced James’ whereabouts, his auto bazaar business, assets, residential address and telephone contacts.

Through networking in social sites, many have secured business opportunities while others have even found fiances, spouses, employees and business partners. Normally, users of such social sites are eager to recruit friends and pals from all corners without any fear of ulterior motive.  Any application or invitation for friendship in such social sites is treated warmly without any prejudice.

With the rate of loan defaults on the rise and the slow pace of recovery, local debt collection agencies have also moved their playing field into social sites, mainly Facebook, to rein in debtors. This is because most of the bad debts are graded as uncollectable due to a lack of contacts and high defaults.

In either of the cases, the debtors have the means to repay but they put up barriers to the debt collection agency. Sometimes, the contacts may be operational but the debtor refuses to reveal his whereabouts or even conceals his financial status.

In such cases, tracing the debtor for litigation or even knowing his assets that can be attached for loan repayment becomes a nightmare. These barriers then form sufficient grounds for creditors, especially commercial banks, to write off such debts. But social sites have rapidly emerged as a goldmine for debt collectors keen on conducting skip and asset tracing.

This is because for skip tracing, debtor only emphasize locating the debtor while asset tracing involves skip tracing plus finding a debtor’s assets which can be attached for settlement. Once they are able to locate the debtor, the collection agency then forwards the contacts in a report to the creditor for legal action and get their pay for skip trace services.

Unlike debt recovery which is based on commission for amounts recovered, skip and asset tracing yields instant payment in case of a breakthrough. But one would be tempted to ask “How do collection agencies use social sites like Facebook for skip tracing or asset tracing?” The answer is quite simple.

Once a collection agency receives a debtor’s file for skip tracing, it will search for the debtor in social sites to check whether they are registered users. If by any chance more than one entry exists under the same name, the collection agency will then check among the listed friends for the names of guarantors.

It is it is obvious that a debtor will always maintain some relationship with his guarantors. This would be used as a sorting strategy to pick the right person assumed to be the hunted debtor. However, if only one entry exists, the collection agency will then browse the profile of the debtor for more personal information. If the telephone contacts or employers information are listed on the profile, the agency will make a physical visit to the employer and try to verify the accuracy of the information.

If successful, the agency concludes the skip trace and hands over a report to the creditor.

In cases of scanty information on the profile, the collection officer from the agency will try to befriend the debtor, seeking friendship. This will then be followed by regular chats to build rapport with aim of eventually gaining contacts and scheduling a meeting.

As a strategy for smooth rapport building, collection officers will first identify your area of interest based on the comments on your site such as dating, business deals, night outs, and car sales among others. Every chat will then be anchored on this to draw the debtor.

Some collectors will even flirt to attract you for a meeting and even suggest dating as is the case of Doreen and James. Flirting and dating has proved workable in asset tracing.

Such affairs will start on a high note and die gradually after the mission for skip tracing has been accomplished. In the worst case scenario, where the assumed debtor is not on any social sites, the collection officer would hunt for the profile of the debt guarantor with the intention of inquiring on the whereabouts of the hunted debtor. If successful, then the agency concludes the skip trace and hands over a report to the creditor.

Surprisingly, the rate of success of collection agencies in tracing debtors has risen with increased recovery of bad loans that had earlier been written off by creditors.