Redefining Skip Tracing in Order to Save the Alternative Lending Market
The term skip tracing has extremely problematic connotations, especially in this day and age. It means the person who cannot return the loan is being chased by the lender. It sets on an image of a poor man struggling, running scared, while the loan sharks lurk menacingly over him. Unfortunately, this blurs the line of who is being wronged. These days, as the world, and especially the economic sphere, is in a tailspin, it seems financial agreements should be considered with more leniency. Obviously, everyone is struggling to maintain some kind of livelihood, given the new circumstances. Yet, many people are skipping out on their loan returns without justification, bringing the lending arena to its knees. Surprisingly, it is not the epidemic that is killing the online lending world. It is the people using this situation to avoid loan repayments.
A moral person would automatically justify the person who isn’t retuning their debt in difficult times. Perhaps they are having unforeseen issues that are keeping them from returning their loan. The truth is once skip tracing is needed to collect money it is because the loan recipient has cut ties with the lender. It is very easy in the ecommerce world to disappear and get away with it, as finding the online seller is expensive and usually not worth it for the alternative lender. With easy technology, you don’t have to be a genius to dodge a loan payment. What many don’t realize is that besides hurting the one industry that could help online sellers when economy fails, is that they are turning themselves into criminals, and that has consequences.
A System in Need of Change
Psychological research shows that most people branded “criminals” consider themselves victims of situations that if never happened, would have led to a very different path. In other words, most people, despite their upbringing and background, are swept into lawless behavior. Usually, it is a spiral, once begun, almost impossible to stop. Les Misérables’ Jean Valjean is an example of a man forced to steal bread to save his family, becoming a fugitive from hard labor camps and leading a life of an escaped convict. Victor Hugo’s novel was intended to show how one misstep can ruin a life for good. The point of the classic book, was that all people inherently want to do good, to consider themselves honest, honorable people.
The US is and has always been a difficult place to create financial independence. Even before Covid-19. While it is the land of opportunity, open to anyone willing to take the chance, it can be a difficult fall, if struggling with money. Millions of Americans are struggling with debt due to a variety of reasons, with the lending world as their only aid. The US is one of the only countries in the world that at the age of 17 a student takes on loans that will affect every decision they make for the next ten years. The fact that becoming sick can put you in thousands of dollars’ worth of debt is mind-blowing in a first-world country. It is no wonder many find themselves on the wrong side of the law, with skip tracing agents on their tail. The system is flawed when so many are considered criminals.
Helping the Loan Recipients, Helping the Lender
Luckily, there are ways of keeping the skip tracing process humane. Thanks to high end tech capabilities achieving a real assessment of financial situations is now a reality. There are ways of figuring out who has the ability to return a loan and using that information to the loan recipients’ advantage. Advanced computer methods based on ML and AI can reveal the true assessment of the loan takers financial status. This information can assist the loan collector in determining a course of action that will truly help both parties. The loan recipient is then offered a plan of action that would allow them to return the money eventually, and on their terms. On top of that, the lender gets the money back.
Obviously, when loans are not paid back it is a problematic situation for all involved. In these times of uncertainty, no one wants to go back to the days banks were the only option for loans, as most online sellers were not eligible for business loans. Using unique capabilities of high-tech computerized systems, the alternative lending world has a way out. Not only can online sellers be reevaluated for an easier repayment plan, but lenders can actually keep track of the borrower’s financial status. Technology brings to light the real picture helping to determine the best route. This is not just an easy solution to a difficult problem. This is a key element of protecting and preserving a vital, much-needed field.