04 Jan 2021

Skip tracing: Searching for a needle in a haystack of over 1bn people


As we look back at the year gone by, a year marked by uncertainty and doubt, one thing we can be certain about, is the financial toll it took on most people. Notwithstanding government moratoriums, lenders were among the most affected in a series of unfortunate events, with recoveries on loans and other dues becoming increasingly difficult. Adding the hypothetical insult to injury, lenders not only had to bear the brunt of recovery amidst the global economic turmoil, but also faced situations where defaulters were untraceable at their listed addresses.

While in some cases, borrowers moved back to their hometowns en masse, in others, they simply disappeared, rendering them untraceable. Salvaging the situation, skip tracing emerged as an obvious option. Simply put, skip tracing is the process of tracking down an individual who has ‘skipped’ town, in order to recover pending dues. Albeit a seemingly simple solution, its execution is much harder than it sounds, particularly in India, a country with over a billion people and vast geographies. In such cases, where does one begin?

At the very outset, comprehensive contact information based on PAN, Aadhaar, Voters’ ID, and other KYC details are analysed to generate leads. From here on, investigators spend a significant amount of time on the ground gathering information from neighbours, relatives, and staking out locations where they might get lucky. Failing to do so prompts the use of other publicly available information such as data from social media handles. Very often this acts as a digital paper trail, leading investigators straight to the offender in question.

As technology advances, so have skip tracing techniques. Through a mix of traditional and new-age methods, skip tracing is today the preferred method of lenders to recover dues from non-performing assets or defaulters.

Validating the success of skip tracing, back in 2017, one of India’s leading public sector banks deployed this practice to recover dues of over INR 74 Crore from retail borrowers. Similarly, skip tracing services have been deployed across sectors, including housing and education loans.

The bottom line

While there is little known about the concept of skip tracing, its practice has been followed for over decades. Right from the economic meltdown of 2008, which saw large scale defaults, to 2020, when we are faced with a similar situation, skip tracing has been an integral part of recovering dues, and in the long run rebuilding the economy with these funds.