Ron Brown, skip tracer, talks debt collecting
Meet Ron Brown, master skip tracer.
As a licensed Oklahoma City private eye, instructor and president/CEO of CSI Group, one of the Midwest's largest asset investigation and recovery agencies, Brown has spent more than 35 years hunting down deadbeats, scofflaws and freeloaders who tiptoed away from their financial obligations.
Brown's unique approach to skip tracing incorporates psychology, neurolinguistics and plain old jungle instinct in pursuit of his prey. These days, he spends much of his time passing on his hunting tips as an instructor for ACA International, the Association of Credit and Collection Professionals, and through seminars based on his skip tracer how-to manual, "Manhunt: The Book."
Ron Brown, author,
'Manhunt: The Book'
Brown has spent more than 35 years hunting down deadbeats, scofflaws and
freeloaders who tiptoed away from their financial obligations. His unique approach to skip tracing incorporates psychology,
neurolinguistics and plain old jungle instinct in pursuit of his prey.
What happens behind the scenes when a credit card goes unpaid? Why do collectors keep calling when you're not the guy they're after? And how can your Facebook posts save skip tracers lots of time?
Ron Brown has all the answers.
CreditCards.com: Let's start by satisfying the skeptics. Is Ron Brown your real name?
Ron Brown: (Laughs) Yeah, for better or worse. Most collectors use an alias. Years ago when I worked a collections desk, I used my real name and people would say, "What is your real name, not your collections name?" I'd say, "That's it!"
CreditCards.com: You receive a nonperforming credit card debt, aka a "skip," only after the issuing bank has already failed to collect it, right?
Brown: Yes; they have their own collection department. But because of the law of diminishing returns, they can end up spending more money than they recover for the effort.
CreditCards.com: How long do they pursue unpaid debt?
Brown: They start out "soft" collections at 30 days; you miss a payment and you get a late notice, and nowadays an automated phone call as well. You miss 60 days, you've missed two payments and it will probably go to a real live person and they will contact you by phone. If they can't contact you -- your phone's been turned off, your cellphone number's been changed -- under the Federal Debt Collection Practices Act of 1978, it becomes a skip. A skip is defined as when they don't have your home address, home telephone number or employment.
CreditCards.com: How long will a bank pursue a skip?
Brown: Usually they work on a sliding scale: they'll do X amount of work on a debt up to $500, X1 on an account up to $1,000, X2 up to $2,000 and so on. They don't do the same amount of work on each account; it's based on the size of the account.
CreditCards.com: What does the issuer do with a skip they can't collect?
Brown: They bundle it with other skips and sell it, most of the time to investment groups but sometimes directly to collection agencies.
CreditCards.com: How old are the credit card debts in these bundles?
Brown: They're all over the map. Let's say there is a $5 million bundle from Bank of America. What happens is, the brokerage company will come in and scrape those out into regions and separate them by dollar size and by age. So I can buy a bundle that is maybe $500,000 in my region -- Oklahoma, Texas, Arkansas, Louisiana -- and they're two years old and I'm going to pay 25 or 35 cents on the dollar, or I can buy another bundle, same region, that's three or four years old for less. They grade them out and you can pick and choose. You can buy a mixed bundle where you're getting anything anywhere, all across the United States and some of it you may not even be licensed to collect in that state, or you can get more specific. The more specific you get and the more current you get, the more you're going to pay for the bundle.
CreditCards.com: There are even bundles that include debts that have expired. How does that work?
Brown: That's right. Usually the statute of limitations on an account is five years from the date of last pay and once it hits that statute, you've got a problem that goes toward the price of what you're buying. If you buy stuff that is two years old, you can work it for a year and then sell it and still get good money on it because the buyer will still have two years to collect on. You can buy a bundle of out-of-statute accounts very cheap, maybe half a cent on the dollar.
CreditCards.com: Investment groups have come under fire for the way they pursue skips. Why?
Brown: Say I'm an investment group and I've bought $1 million in nonperforming credit card debt for a nickel on the dollar, $50,000. What do I do with it? I turn it over to a collection agency for collection. But rather than hire a professional skip tracer or "cybertracker," they use what are called "skip guessers." There's a big difference. A skip guesser looks in the phone book in the last known city, finds a number for a Ron Brown, calls me up and starts harassing me. It's giving the entire industry a bad name.
CreditCards.com: To consumers, it seems as if skips simply pass from collection agency to collection agency. What's the real story?
Brown: Actually, they move from investment group to investment group to investment group. Say I have an investment group. I buy the package at 30 cents on the dollar and give it to a collection agency. That collection agency works it for a certain amount of time and then I ask for the business back. I've made X amount of money off of it. I take what's left and I bundle it and put it back on the market where another investment group may buy it for 20 cents on the dollar. This may happen four or five times.
CreditCards.com: Anybody who moves frequently has received calls from collectors looking for the person who used to have their phone number. Why do they keep calling when we've told them we're not who they're after?
Brown: You told the first collection agency that you are not the right party, but those notes don't move with the account. It may be bought, transferred and handled five times, and you think hey, this agency just keeps on calling me. It's not the same agency and the data doesn't flow. If it did, they couldn't sell the account. You're not going to buy an account when you know that the name and address attached are no good.
CreditCards.com: Whether you've reached the right party or not, nobody really wants to talk to a skip tracer. How do you break through that barrier?
Brown: When I'm training skip tracers, I teach them to use a first name only, and one that ends in "ie" or "y." Why? If I called you up looking for your brother, who would you give more information to: Mr. Brown, Ron or Ronnie? Ninety percent of the time, we've found that people who use an "ie" or "y" name get more information. Telephonically, you are creating a perception of who you are. Ronnie is a young, nonthreatening young person, so they'll give him more information.
CreditCards.com: These days, why not just find the skip on Facebook and "friend" them?
Brown: (Laughs) That's misrepresentation; violation of Section 807 of the Fair Debt Collection Practice Act. The trick with cybertracking is not to track them but to track their friends. Find out who their friends are; after all, their friends aren't hiding. You read their friends' posts and you see where they're all going to meet somewhere at a certain time, or you watch for things like, "How do you like your new job" or "How do you like living up there in Seattle," things like that. Hunting people on the Internet works to a point, but you're not going to find the real pros on the Internet. If you do, they're looking down false trails. That's where true skip tracing comes in.
CreditCards.com: Does your likelihood of recovery decline as time passes?
Brown: Yes, as the spoor gets cold, the harder it is to find the people. There is an exception to that however. A lot of times, a person's situation will change within three or four years. Maybe they had a big college debt, used credit cards and didn't have a job and now, four years later, they've got a job, they're married, they've got a family and they don't want to lose their job and get their salary garnished.
CreditCards.com: What advice would you give skips who have been contacted by a skip tracer?
Brown: If you owe credit card debt, contact the people and offer a settlement. You can run but you can't hide. Even if it goes past statute, it stays on your credit report for seven years, and they're still going to hound you on it. If you've only got two or three years left, contact the person who has the debt and try to offer them some type of settlement. If they paid a nickel on the dollar for your account, they'd be tickled to get 20 cents on the dollar.
CreditCards.com: With so much bundling and selling, how can you find out who currently owns your debt?
Brown: You're looking for the last person who listed it. When a credit card company sells the debt, one of the stipulations is that the company buying it can list it on your credit record; it can't be double listed or it would look like you have two debts. Once a year, you can get a free credit report from all three credit bureaus. Pull your credit report, see what's on there, and if there are things on there that you can settle, it pays to do so.
See related: True debt collection horror tales, Debt collectors' ethics codes
Published: August 3, 2012
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!