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Training Page For Collections/Lending/Audit

by Edmund Pankau

(Ed. Note: This is an unusual topic for the BANKERS' HOTLINE training page, but one we felt would be useful to you. It also will make you aware of how much information about a person is a matter of public records. See "The Identity Cat Is Out Of The Bag" article at the bottom of page 6)

Much of the business of the financial institution is the making (and collecting) of loans. Whether personal loans or auto loans, there is always risk involved. It's up to the loan officer to assess that risk and be guided accordingly. If the loan officer guesses wrong, it's up to collections to make it right.

It used to be that our applications, which were pages and pages long, held enough information for us to be able to recover delinquent loans by tracking down the assets listed by the applicant. But when we started granting 20 minute loan approvals (sometimes even less!) we did not have all that background information we used to have.

Where does the collection process start? First by making a demand on the borrower. If that fails, then the search must go beyond. The collector has to find the assets the debtor has in order to make claim. The places to look are in the public records.

Conduct a "Hunt"

  • Tax Assessments (County Tax Assessor) This office provides information regarding the taxes paid and ownership of real estate, buildings and improvements, equipment, and frequently vehicles, boats and aircraft in an individual or company name.
  • Recorders Office (County Clerk) These records document the purchase and sales of real or tangible property, often providing the purchase price, amount financed and the names of the purchasers, sellers, and financing agencies.
  • Probate Office (County Clerk) This resource provides information regarding the assets and liabilities in the estate of a deceased person, as well as the names and addresses of heirs, and any assets transferred through the Will registered in that jurisdiction.
  • Aircraft (Federal Aviation Administration, Oklahoma City, OK) Records information regarding the ownership of aircraft and the registration, flight records, and physical status of pilots
  • Boats, Yachts, or Watercraft Vehicles The U.S. Customs Office maintains a record of all motor vessels over 5 tons registered in the United States. For information on smaller boats, try your State Licensing Department.
  • Motor Vehicles Most State Department of Motor Vehicle provide information regarding the ownership, registration, and financing agencies of vehicles within their state. Many offices provide a list of all vehicles in the name of an individual or company in their jurisdiction.

Look For Records
Every application we fill out, every transaction we make, becomes part of the public record. In most cases, you'll have to go to the offices where these records are kept in order to get the information you want. This requires some digging. However, in some governments, you'll now find this information available through computer access. These are often the most cost effective sources, and the most efficient way of determining information about business connections, backgrounds and assets.

  • Voter Registration - will reveal the date of birth, the social security number and the address of the voter.
  • Marriage License - provides maiden and married name, date of birth and social
  • Driver's License - records address, date of birth, and can also provide a photo.
  • Credit Reports - for prior addresses, any other names used, financial transaction history.
  • Corporate Records - from the Secretary of State - often in loan files to document the ownership of a business name. Also should reveal the names of officers, directors, and registered agent of corporate entities.
  • County Clerk - Will reveal liens, judgments and secured interest filings that document collateralization of loans.
  • Business Credit Reports - TRW and Dun & Bradstreet offer inexpensive reports detailing business ownership, activity, and financial information.

Security / Audit Officers
The "hunting" described above describes information needed for borrowers. However, there are other times when a more in-depth investigation is necessary to really learn about a person. In these cases, you'll want to go even further. After checking personnel files and account statements, check out:

  • Criminal History - Available at the County Criminal District Clerk's office, criminal records will detail arrests, indictments, and charges of convictions of an individual within that county. A review of the actual court files will often list previous charges in other jurisdictions. You'll want them all. A thorough investigation may lead you to several counties.
  • Civil Litigation - The Peoples Court, the place where individuals and companies sue each other and provide a wealth of background and financial information through depositions, interrogatories and the discovery process. Suits are filed at the County, District, Federal, and Bankruptcy Courts.
  • Newspapers/Libraries - Almost all of the major newspapers and many thousands of publications are now available on-line computer through databases that provide media articles. This is often one of the most cost effective and efficient means of locating background on an individual.
  • People - Talk to former employers/employees; associates; ex-spouse; family members; parties in litigation with subject; former business associates; agents; other banks

Edmund J. Pankau, CLI, CPP is one of the leading authorities in the fields of financial investigation and the examination of security issues.He is a nationally recognized author and speaker on security and investigation techniques and frequently instructs at government, law enforcement and private industry conferences throughout the world.

Copyright © 2001 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 11, No. 2, 2/01

First published on 02/01/2001

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