Data business undergoes big changes

A lot can change in 20 years.

Mike Dores, president and founder of Merlin Information Services, remembers when private eyes and “skip tracers” such as himself had to work the phones to trace down leads and go dig public records out of file cabinets and microfiche collections in county courthouses if they wanted them.

“It was difficult to get at,” Dores said about information in the 1980s and 1990s.

A private investigator since 1981, Dores has built up quite a collection of information over the years.

Merlin’s server room, in a nondescript office building south of Kalispell, has two rows of computer stacks holding an estimated 20 billion public documents with information on virtually anyone and everyone.

Data includes death records, marriages and divorces, civil and criminal and bankruptcy court indexes, tax liens, property tax rolls, vehicle registrations, warrants, address histories and telephone numbers, gathered from around the country.

It’s an ever-growing collection amassed for registered customers — validated as legitimate businesses by a Merlin compliance office — to search.

Customers include pre-employment screening agencies, private investigators, insurance companies and collection agencies. All of them are trying to find someone or something and looking to Merlin’s stash of records for leads.

After a breach by a Nigerian identity theft ring in 2005, Dores stressed that his company is exceedingly careful about whom it sells data to, adding that the firm never has been sued or implicated in a case where information was used to hurt or stalk someone.

The same goes for private investigation and skip tracing cases the company takes on.

“If somebody comes in here and wants us to find their old girlfriend, the answer is no. We usually tell them, ‘Sure, we’ll find your old girlfriend, but we’ll tell her you’re looking for her and give her your phone number, and if she wants to call you she will.’ That usually makes them go away,” Dores said.

Skip tracing traditionally refers to the search for people who skipped out on debts or court judgments.

Dores said he takes a broader view of the term.

“To us it is looking for anybody for any reason. They could be heirs with money coming to them. They could be a witness to a traffic accident, or they could be a debtor with a judgment against them. Anybody that needs to be found,” he said.

The old Merlin line goes that good people are found for good reasons and bad people are found for all the right reasons.

MERLIN INFORMATION Services celebrated 20 years in business last October.

Over the last two decades it has risen to the top among mid-tier companies in its industry, Dores said.

In 2010, Merlin was recognized as one of the top six skip-tracing solutions by Collection Advisor Magazine.

This past January, the same magazine recognized Merlin’s suite of data solutions as one of the collection industry’s top 25 technology products.

DORES FOUNDED Merlin in Ojai, Cal., in 1991 after quitting his job as a manager for one of the state’s largest collections processing companies.

That same year, a company selling a “revolutionary” set of two compact discs with every phone listing in the United States got Dores interested in the new and better way to collect and share data.

Dores said he bought the two CDs for about $2,000, became an authorized re-seller and started Merlin, selling the discs to others.

Continuing to run his investigation business, Dores partnered with an investor to buy some equipment and start building a data collection business.

For his first project, Dores bought mainframe computer tapes from the California secretary of state. The tapes held records of property pledged for secure bank loans; information that could only be accessed at the secretary of state’s office.

Working through trial and error, it took Dores about six months to get the data off the tapes, translated onto his computer and then burned onto CDs.

“One after one we built all these different indexes,” Dores said. “It was a little business because there weren’t a lot of people to sell to.”

DORES BOUGHT five acres of an old cherry orchard on Flathead Lake and moved his family and business to Flathead Valley in 1994, having visited the area twice before on vacation.

Business boomed until the latest recession, when employment at Merlin fell from a high of 75 down to about 45.

“We always thought we were recession-proof because our customers were collections agencies and private eyes. It wasn’t true,” Dores said.

Business fell 20 percent in October 2008, Dores said.

And where information once was scarce and labor-intensive to gather, more and more of it has migrated online where it can be accessed by almost anyone for free at any time.

“It’s a whole different world than when we started ... Today it’s like selling corn. Everybody’s got it,” Dores said of the data-selling business.

But as more and more data has become available, it’s become harder and harder to work through. That’s led to a demand for not only better data, but skilled people to analyze it — a trend expected to continue.

Clients such as collection agencies don’t want a list of 10 old addresses or telephone numbers to work through, they want the right one.

“The part of our business that’s growing is the manual skip-tracing operation,” Dores said. “They’ve doubled over the last year.”

Given the major challenges and technological upheavals in the industry, Merlin’s survival is nothing short of a miracle, Dores said.

“There’s very few companies in our business that were around 20 years ago ... The fact that we’re still here is quite amazing.”

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.