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26 | 30TH SEPTEMBER - 6TH OCTOBER 2016 | UTILITY WEEK Customers Roundtable Debt Collection London, 15 September 2016 Debt's the issue – not just collection Indebtedness is a problem for all society, not just utilities, and data protection laws are hampering strategies to deal with it, Mathew Beech hears. D ebt, in particular bad debt, is a peren- nial issue for energy and water com- panies to deal with. So in London on 15 September, representatives from across the sector, including regulators and chari- ties, met for a roundtable organised by Utility Week and sponsored by Fico and Cognizant to discuss the best ways for customers and the companies to tackle it. The problem of bad debt is getting worse for utilities. Analysis from PwC has revealed a 60 per cent rise in bad debt across the energy sector, while the water sector has seen a 44 per cent increase. This burden adds hundreds of millions of pounds to the total customers have to pay, and utilities are eager to recoup as much of this as possible. With this challenge in mind, our guests comprising senior debt collec- tion representatives, regulators and con- sumer bodies met to discuss how best to help indebted customers. The first hurdle all the delegates agreed on, and one that is also seen as the most dif- ficult to overcome, is identification. Utilities, especially incumbent suppliers, sometimes have difficulties knowing exactly who they are supplying because they do not have full contact details. This is coupled with a disengagement by the customer, meaning there is oen no con- tact until debt collection procedures, either letters or a debt collector knocking on the door, have begun. However, rather than this being purely a negative, which could further erode what lit- tle trust there is in utility providers, delegates stated this should be taken as an opportunity to build trust and that this first contact be used to help the customer, who may be vul- nerable and in need of financial assistance. It was at this point that the issue of debt was extended beyond just utilities, with some delegates saying it is oen a wider issue affecting other areas – such as bank- ing and telecoms. Third party organisations, such as charities, are oen contacted by an individual if they are struggling to pay their bills, and this information is a potential gold- mine for utilities, provided data protection and sharing regulations are not breached – which is something of a sore point. There were passionate calls for the Data Protection Act to be reformed, and some del- egates stated that legislation going through parliament is looking to address some of these problems. If data is able to be shared, something everyone around the table was keen to see, then an all-encompassing debt strategy, whereby all utilities can ensure customers get the necessary support, could be developed. This strategy would deal with those in debt, but the representatives were all keen to see a more proactive stance taken and one that does not have to wait for legislation. Data was widely agreed to present a potential solution – especially with smart meters being rolled out. The depth of real-time data that smart meters will bring should allow analytics solu- tions to spot trends on which utility companies can act. This would allow one-off late pay- ments or more entrenched trends to be spot- ted, and again, the right help to be provided. This segmentation, off the back of greater data, would also help to address the identifi- cation problem, which was returned to at the end of the debate as an overriding challenge. If that could be cracked, the debt issue – and not just collection – should become an easier puzzle to solve. Views from the table: Nilesh Patil, sales director – energy and utilities, Cognizant "We need to look in depth at the pertinent industry problems such as debt so we can deliver solutions to help resolve the issues." Daniel Walker-Nolan, principal policy manager – energy and consumer policy, Citizens Advice "The extra data from smart meters must be welcomed and it can be transformational. You can notice these debt issues a lot earlier."