2Q LexisNexis Skip Tracing Index Displays Mixed Movement

The three segments of LexisNexis Skip Tracing Index moved in different directions during the second quarter as activity by creditors and collection agencies dropped, while action from collection law firms climbed higher.

The index reading for collection agencies slid to 81.0, continuing a downward march that’s now six quarters old. The creditors index segment dropped for the second quarter in a row to settle at 105.6.

Meanwhile, the collection law firm reading edged higher for the first time since the third quarter of last year to land at 105.1.

Analysts noted the LexisNexis Skip Tracing Index measures skip-tracing activity within different accounts receivable management company segments. A higher figure reflects an increase in skip tracing activity in the general market. The first quarter of 2010 was established as the baseline (100.0) reference period for the index.

“The steady erosion of collection agency skip-tracing activity continued in the second quarter of 2011,” analysts explained.

“As charge-offs plummet at banks and new credit issuance continues to lag, fewer accounts are finding their way to third party collection agencies,” they continued. “While the drop-off was not quite as steep as the first quarter, collection agencies are still finding less reason to skip trace their accounts. Creditor use of skip tracing also fell in the quarter, but it was coming down from very high levels.

“Collection law firms, meanwhile, increased their use of skip tracing services in the second quarter, perhaps signaling a strategy shift toward litigation on the part of both first and third party decision-makers,” LexisNexis went on to share.