Is An 80% Bad Address Rate Normal for Collection Serves?

• July 09, 2013
• by Kimberly Faber
• Business Tips
• Social Media

A question that popped up in our LinkedIn group comes from a firm that normally handles personal injury and domestic serves. Recently contracted by a large law firm that deals with collections only, a process serving firm based in Washington D.C. wants to know if the number of bad addresses is normal for the industry. Though the last couple of weeks has brought in approximately 100 serves from the company, 70% showed new addresses upon skip trace, and 80% of the addresses were still bad. 10% were evasive to the point that surveillance was required. The group member wants to know if these statistics are normal for the collections side of process serving.

Ernie Coronado, a process server in Denver shared that with a few collection agencies as clients, his percentage has not been as high. “[Bad addresses] are a constant problem in this industry,” he states. “I will always charge a bad address fee.” Coronado notes that his company does offer to skip trace after attempt for a fee, but many of the companies would rather pay the bad address fee and conduct the skip trace in-house. “If you can get the legal team trained to process better addresses it can be decent volume business,” he says.

Another group member noted that 80% seemed high but in the collection world, nothing is surprising. “Unfortunately,” he noted, “surveillance just isn’t worth the money in collections unless the client wants to pay for it.” John Moore, a group member based in Seattle shared his averages: 50/50 for residential addresses and 60/40 for a place of employment. “Take this business as fill,” he advises, “not your bread and butter!”

Serving for a very large collector, my average is about both 50/50 for residential addresses being incorrect and maybe 60/40 in favor of Place of Employment (POE).

Process Server John Moore

Offering insight from both sides of the table, paralegal and certified process server Lanisha Lawrence shared her experience. “Working as a paralegal in a collections firm and also working as a certified process server I send out at least 75 cases a week for service and we do our own skip trace,” she shared. “Most of the cases that I have are where another creditor or agency may have already tried to contact them or serve them and they just start moving around to avoid paying.” Lawrence also notes that the person may have lied about their address, date of birth, and other personal information knowing in advance that they likely wouldn’t be able to or choose to pay it.

The topic also stirred discussion of whether or not process servers should charge for attempts and bad addresses as well as whether or not to conduct skip traces and verify addresses before attempts. To view the full thread and join the conversation, click here.