Utility Week

25 ISSUE 02 FEB/2019 E X P E R T V I E W w w w . i n t r u m . c o m 25 ISSUE 02 FEB/2019 T he scale of bad debt facing the utilities and telecoms sector requires innovative thinking and an appreciation of the particular challenges facing different services, from smart metering to the use of white data and the difficulty of establishing periods of residence. A common thread, however, is to raise standards as high as possible. Enhancing ways of identifying and working with vulnerable customers is key to that. Outsourcing or debt sale? Currently we are seeing revived interest from the sector in debt sale strategies – though a range of options are available to utilities, from the sale of older tranches of debt to more BPO- style arrangements. Using specialists in collection is important as strategies and skillsets differ from those needed for regular billing and account management. As in financial services, we expect to see utilities businesses moving to earlier outsourcing and debt sale in future as they clear out historic arrears and are able to focus on more recent bad debt. is is the right approach: if a customer is struggling to pay their bills, they stand a far better chance of getting their situation under control if the supplier acts early. Early intervention Using specialist debt collection services has too often been seen as a last resort, an option when there are no other options. In fact, using a sensitive approach at an early stage can enable the business to restructure the debt and stop high levels of arrears building up. is is important given Ofgem's finding in 2017 that the number of customers in debt had fallen but the amount owed had grown, with customers building up an average of £628 in unpaid bills before starting to repay. e barriers to repayment are greater at this stage and the potential distress to customers greater. Get it right at this point and customer loyalty increases. Technology in collections In today's digital world, customers are used to handling their finances online and on the go so it is important to offer a range of digital options in the collections process. Not everyone is comfortable discussing their situation on the phone – some prefer to use bespoke collections portals where they can enter their income and expenditure information in their own time; engage with chatbots powered by artificial intelligence; text; or email. Technology is also adept at identifying vulnerabilities that may have been missed. For example, we use speech analytics to pick up words and phrases that indicate vulnerability and can also detect stress in a person's tone. Real- time tracking of calls and feedback from customers means the collections team can respond quickly, deploying emotional intelligence to ask the right questions at the right time. E t h i c a l c o l l e c t i o n s : a s o f t o p t i o n ? Our experience is that working sensitively with people in debt returns more money than an aggressive approach. We're already working with local councils and utility companies to implement our philosophy, which is backed by a +62 net promoter score – an unprecedented level for our industry. e benefits of this approach are many: Better identification and treatment of vulnerable customers Increased customer rehabilitation Brand loyalty Raised collection levels Security of going beyond compliance Advanced technology offers choice Reduction in bad debt levels Intrum provides a wide range of credit management services and has a presence in 25 markets in Europe. For more information, contact Client & Sales Director Ian Davies 07960 580747 ian.davies@intrum.com or Head of Business Development Phil Hickson 07776 513535 phil.hickson@intrum.com Act early to reduce bad debt Eddie Nott, Managing Director, Intrum UK

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