The validity and integrity of consumer data used by creditors and collectors has been a consistent question in the debt industry: do we have the right information on the right consumer to contact him about his debt?
According to a 2013 study by Neustar, Inc.: “Up to 20 percent of customer records are linked to the wrong mobile phone number.” Couple that with this data point: according to the FTC, collection agencies attempt to collect approximately $1 million dollars each year that consumers claim they do not owe. (This is out of a study of 90 million consumer accounts with a face value of $143 billion.) And then, because bad news comes in threes sometimes: Industry research reveals that 2 percent of customer records in CRM systems become obsolete each month due to changing conditions. (For example: death, divorce, marriage, relocation.)
That’s a considerable number – and it provides ample opportunity for lawsuits for eager consumer attorneys. It’s also a waste of your agency’s resources: the time and energy wasted on wrong-party contacts can, of course, be put to better use working with consumers with actual, collectible debts.
Collection agencies that are able to verify consumer phone numbers, linking this info with name/address/other identifiers, are better positioned to improve their collection rates and locate hard-to-find debtors. However, as the FTC itself has pointed out, the accuracy of the data obtained by collection agencies is often suspect. Too often, there is little supporting documentation included in the file from the creditor for verification purposes.
Authenticating phone data enables collectors to assemble more accurate files. The ability to verify and maintain accurate customer data upfront, and on an ongoing basis, lifts conversion rates significantly.
What strategies are your agency using to verify data? What kinds of conversations are you having with your creditor clients when files arrive with less data than you’d hope? We’d love to hear your thoughts in the comments.