What Does Debtor Tracing Involve?
Does a business or individual owe you money? Are you currently unable to locate them? Then you may need to make use of a debtor tracing service. To find out what debtor tracing means, and how the process works, read this guide from the team at Thomas Higgins Solicitors now…
What is debtor tracing?
Debtor tracing refers to the process of locating an individual or business (a debtor) that owes another party (a creditor) money.
Debtor tracing is normally undertaken by a dedicated ‘tracing agency’ on behalf of the creditor.
There are a number of instances where a creditor will choose to use the services of a debtor tracing agency. These include:
- A debtor has deliberately absconded without paying what they owe to the creditor. The creditor is unable to locate the debtor and does not have a means of contacting them.
- A debtor may not realise they owe the creditor and have not provided a forwarding address or contact details.
- A debtor has died, and the creditor needs to contact their next-of-kin to inform them that the debt must be recouped from any remaining estate during probate.
These are just a few of the reasons that a creditor may choose to use a debtor tracing service.
It’s important to note that creditors must have a legitimate interest in locating a debtor. Furthermore, the process of tracing a debtor must not impact the debtor’s rights, freedoms or interests.
Note - it is very important that all debtor tracing activities are conducted in compliance with data protection laws. As such, it is strongly recommended that you use a suitably experienced debtor tracing agency.
How does debtor tracing work?
Whilst the process of tracing a debtor will vary from agency to agency, there are some standard steps that tend to be followed in the majority of cases. Below, we’ve set out the various steps that typically make up a debtor tracing investigation.
Initial information
Contrary to common expectations, very little information is typically required to begin a debtor tracing investigation.
Where possible, though, the creditor should try and provide the debtor tracing agency with the following pieces of information:
- The full name of the debtor (including any middle names if known).
- Date of birth - this piece of information can significantly speed up the search process.
- Last known address - failing that, any previously known address.
The points above are the ‘essentials’ of a debt tracing investigation. However, it’s helpful to provide as much information as possible to the agent. Other types of information that can be helpful include:
- Any aliases or nicknames that the debtor is known by.
- Telephone numbers and email addresses connected to the debtor.
- Details of the debtor’s employment (if the debtor is an individual).
- Any known trading names or variations thereof (if the debtor is a company).
- The names and details of any family, friends or people the debtor shares a house with.
- Any information you have about the debtor’s vehicle.
- Any links to social media profiles.
All of these pieces of information can help a debt tracing agency locate the debtor much sooner.
Research and investigation
Once the debtor tracing agency has collated and analysed the various pieces of information provided by the creditor, they will then move on to the research and investigation stage.
This research and investigation stage will typically see the agency consult a number of databases and sources to build up a picture as to where the debtor could be. These databases/sources include:
- The electoral roll.
- Credit Reference Agencies.
- HM Land Registry.
- Companies House.
- The Gazette.
Electoral roll search
A search of the electoral roll is often the first action that a debtor tracing agency will take. This is because the electoral roll is one of the most powerful tools at an agency’s disposal, listing both current and previous addresses of an individual (who is registered to vote).
It’s important to note that a search of the electoral register doesn’t always yield accurate, up-to-date information about a debtor, however. This is because a debtor can either fail to update their information on the register or opt out of the public record. In either instance, the address shown on the electoral roll will be out-of-date.
Credit reference agencies
A debtor tracing agency may also choose to conduct what’s known as a ‘credit reference search’.
This involves the debtor tracing agency contacting each of the UK’s Credit Reference Agencies (CRA) and searching their databases for information about the debtor.
At the time of writing, the main Credit Reference Agencies in the UK are:
- Experian.
- Equifax.
- TransUnion.
Credit Reference Agencies receive their information from a huge range of sources, including utility companies, retail banks, credit card companies, phone providers, mortgage providers and more.
In other words, if an individual has taken out some form of credit - then their details are likely to be on at least one of the CRA’s databases.
The reason that a search of a CRA’s database is so valuable and effective, is because it generally allows the debt tracing agency to connect the debtor’s last known address to a current address (for example, if the debtor has moved to a new address and set up an account with a utility provider, this will generally show up on a CRA’s database).
CRA databases can also include information about a debtor’s aliases or any financial partners they have.
Land Registry search
The third main source of information that debtor tracing agencies typically use is the Land Registry’s database.
As the Land Registry maintains a database of all leaseholds and freeholds in the UK, it’s an effective way of finding the addresses of any properties that a debtor owns.
Companies House
If the debtor is a company rather than an individual, then the Companies House website can be an invaluable source of information.
A search of the Companies House database can reveal whether a company has changed its name, address and company status. It will also show if a company is in liquidation or in the process of being struck off the ‘Companies Register’.
You can typically also find information about the directors of a company and their respective correspondence addresses.
The Gazette
Another way of obtaining information about a company that owes a debt is to refer to The Gazette.
The Gazette is one of the official journals of the UK Government and is often referred to as ‘the official public record’.
For the purposes of debt tracing agencies, The Gazette is useful as it details every corporate insolvency. The Gazette lists such valuable pieces of information as:
- The company name and its registered number.
- The company’s registered address.
- The type of insolvency (e.g. compulsory winding up).
- The dates of key events in the company’s insolvency (e.g. notices to creditors, resolutions for winding up etc).
- The name and contact details of the liquidator.
Other methods of debtor tracing
Aside from the sources above, there are a number of other actions that a debtor tracing agency may take to locate a debtor. We’ve detailed some of these alternative tracing methods below.
Social media
Social media platforms such as Facebook, Twitter and Instagram can be a rich source of insights and information for debt tracing agents.
When used and searched correctly, social media platforms can provide everything from aliases of debtors to their location. Social media platforms can also be used to generate and follow-up on leads - effectively allowing you to ‘crowdsource’ vital intelligence.
Search engines
In today’s digitalised world, most people have a sizeable ‘digital footprint’. This refers to the trail of data that people leave behind when they use the internet. This can include everything from comments left on websites, blogs, social media posts and more.
A debt tracing agency will typically conduct thorough searches of search engines such as Google to see what ‘breadcrumbs’ of information they can find about a debtor.
Emails
If the creditor has any emails from a debtor, then these can potentially reveal the debtor’s location.
How?
On many email programs, you can ask the program to ‘show internet headers’. This will reveal the IP address of the machine from which the email was sent. Then, using a site like whatismyipaddress.com the agent will be able to find an approximate location from where the email was sent.
Websites
If the debtor has a website (e.g. they’re a sole trader), then it can also be possible to locate them from their website via their domain name.
A debt tracing agent will be able to go to the Registration Data Access Protocol and enter the domain name. From there, they may be able to find out which address has been used to register the domain.
How much does it cost to trace a debtor?
At this point, you may be wondering what all this costs. The answer is it depends.
As no two debtors are the same, the process - and amount of time spent tracing them - can vary considerably from case to case.
Thomas Higgins Solicitors does not offer a debtor tracing service however we can put you in contact with a company who does to get an accurate idea of how much it will cost to trace your debtor. It’s recommended that you contact a debtor tracing company and provide them with information about the debtor and debt. They will then be able to provide you with an approximate cost.
The benefits of using a debtor tracing agency
As you’ve just read, the process of tracing a debtor (be it an individual or a company), can be a complex and time-consuming process.
It’s for exactly this reason that, for the majority of creditors, it makes financial sense to outsource their debtor tracing to a dedicated.
Below, we’ve detailed some of the top benefits that come with using a reputable, experienced and suitably-qualified debtor tracing agency.
Time and cost savings
As we mentioned above, tracing a debtor can often prove to be a time-consuming and costly process. This is especially true in the case of intransigent debtors who are determined not to be found and made to pay what they owe.
By choosing a debtor tracing agency to trace the debtor on your behalf, you free up your time to focus on your core business.
Access to expertise
There are many nuances to tracing debtors, and it can take considerable time and expertise to master many of the tracing techniques that we’ve outlined in this article.
By choosing a dedicated debtor tracing agency, you’ll be tapping into many years of experience in tracing debtors.
Compliance
When attempting to trace a debtor, it’s vital that any and all actions toward that end are carried out in a legal and compliant way.
An experienced debtor tracing agency will know what actions are - and are not - allowed within the scope of the law.
In short, using a qualified and experienced agency to source a debtor on your behalf can protect you and your business from legal repercussions.
Debtor tracing UK
Thomas Higgins Solicitors does not do Debtor tracing however we can put you in contact with a company that can, If you want to cost-effectively trace a debtor, then contact the team at Thomas Higgins Solicitors today.
We can help you trace debtors in a compliant, safe manner in line with applicable regulations such as the General Data Protection Act.
