Another Way to Maximize the Value of Litigated Accounts

Another Way to Maximize the Value of Litigated Accounts

By: Joel Rosenthal, ProVest VP, Head of Credit Collections, Business Development & Client Relations

A Challenge of Litigated Accounts

Collection litigators often face a common issue: a backlog of accounts that have proven difficult to serve. These accounts, while still within the statute of limitations, may lack current address information; however, with the right approach, these seemingly "dead" accounts can be transformed into valuable assets.

Approaches to Revitalizing Non-Served Litigated Accounts

Typically, a collection litigator's strategy for non-served litigated accounts includes conducting regular recursive internal skip reviews to update address information. However, to fully realize the benefits of this extra effort, you shouldn't stop there. For accounts that remain unresolved, implementing a second targeted initiative—such as our "Trash to Treasure" program—can be highly effective.

Focusing on unable to serve inventory that is still in statute, this second step is designed for files that your recursive skip review does not identify a new address. It is important to work closely with a skilled process server who specializes in advanced skip-tracing techniques on accounts where the internal review did not yield new address information. By combining these two approaches—regular skip reviews and targeted initiatives—you can ensure continuous updates and effectively identify new addresses.

Success Rates and Benefits of Adding a Targeted Initiative

The impact of implementing a targeted initiative with a process server for accounts where an internal review fails to identify a new address can be substantial. Typically, new addresses are successfully located for about 30-40% of these cases, leading to successful service in approximately one-third of them; service rates for second addresses tend to be lower compared to initial addresses.

Our experience shows that collection litigators who frequently employ this second step for their portfolio of litigated accounts can see an overall service rate increase of up to 3-5%. While this increase may appear modest at first glance, it represents a noteworthy enhancement within large-scale debt collection operations, potentially resulting in significant financial gains.

Operational Considerations of Adding a Targeted Initiative

When implementing a two-step strategy to litigated accounts, several operational factors should be considered for the targeted initiative portion:

• Quick turnaround times: Look for solutions that can process requests within 1-2 business days, allowing for swift action on new leads.
• Data size flexibility: To ensure information remains current, send only as many accounts as your team can effectively manage for new addresses. Breaking the data into manageable batches and sending them at regular intervals is much more effective than overwhelming your team with a large volume all at once. If accounts remain unprocessed for too long, their address information may become outdated.
• Expanded scope: Consider also including files where the first address resulted in a bounced demand letter mailing and no new address could be identified internally.

Conclusion

Regularly reviewing your inventory of litigated accounts presents a valuable opportunity to revitalize seemingly stagnant cases, transforming “trash” into “treasure” through resourceful strategies. By incorporating specialized skip tracing programs with a process server alongside recursive reviews, collection litigators can significantly improve their ability to locate and serve debtors, effectively breathing new life into inactive accounts. Adding a second step to your strategy can result in up to a 3-5% increase in overall service rates. Expanding your process to include targeted initiatives not only enhances recovery rates and operational efficiency but also enables litigators to achieve better outcomes and improve their and their client’s bottom line.

In an increasingly competitive landscape, the ability to extract value from previously unproductive accounts can be a game-changer. Those who effectively leverage these creative approaches position themselves at the forefront of success, unlocking hidden value in aging inventory and gaining a crucial competitive edge.