Severn Trent Water (STW) has become the first utility to share its customers’ default payment data as it agrees a partnership with credit reference agency Equifax.
The water company has signed up to the Equifax Insight closed user group, where it will share data it holds on its customers with Equifax in return for access to other credit payment performance data.
STW is aiming to improve its effectiveness in collecting bad debt as well as having more access to the financial situation of its more vulnerable customers. The company can then separate debtors who have defaulted on their water bills between the ‘can’t pays’ and the ‘won’t pays.’
The firm’s sharing of its customer credit data in the Insight closed user group is also expected to bring benefits for traditional consumer credit providers, giving them a greater depth of intelligence on customers’ financial commitments.
Jamie Gibson, Debt Strategy Manager at Severn Trent Water, said:
“As the level of losses from bad debt rises as a consequence of the economic downturn, it is vital that we find ways to improve our understanding of our customers’ financial commitments, as well as trace gone-aways.
“Having worked with Equifax for a number of years, we already have a very good understanding of how credit data can support our debt collection strategies.
“We are very excited about the prospects of now being able to access the Insight closed user group database to give us an even greater depth of knowledge about our customers’ credit commitments. In particular, we believe this will help us support the customers that are most financially vulnerable because we will have a fuller understanding of their circumstances.
“We also believe our customer data will enhance the credit decision strategies of other consumer lenders.”
Ben Ecroyd, Business Development Director, Equifax Utilities added that as one of the first water companies to share data with a credit reference agency, Severn Trent Water is breaking new ground for the industry.
“Water companies have a particularly difficult customer relationship challenge because of the mandated requirement to supply water to all residential addresses. It is therefore crucial that these organisations have the best understanding of their customers’ financial status in order to manage them most effectively.
“Severn Trent Water has taken the initiative on this issue and we expect that, by sharing its own customer default data, and thereby being able to access Equifax Insight data in return, a significant impact can be made on reducing the losses it has from bad debt and gone-aways.”
It is estimated that bad debt currently adds £15 a year to the water bills of paying customers.