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News Release from: Equifax | Subject: Payment behaviour in water industry
Edited by the Processingtalk Editorial
Team on 16 September 2005
Insight into UK water industry debtor
behaviour
Following the success of research and analysis by Equifax in 2004, UK Water Industry Research has awarded a contract to gain further insight into the payment behaviours of water industry customers
Following the success of research and analysis conducted by Equifax in 2004, UK Water Industry Research (UKWIR) has awarded a second contract to the company to gain further insight into the payment behaviours of water industry customers The Equifax pioneering research into water indebtedness will help the industry develop a stronger understanding of why some customers do not pay and build up a better picture of the industry's debtor base
This article was originally published on Processingtalk on 4 Feb 2003 at 8.00am (UK)
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In 2004, Equifax was chosen by UKWIR to conduct vital research into water company debts, the industry's first research of its kind.
With record levels of debt being reported amongst UK consumers and water company debt levels at unprecedented levels, such research is proving invaluable to the industry.
Tony Lee, New Business Director of Equifax, comments, 'We are delighted to be working with UKWIR again and believe Equifax research will be instrumental in giving the Industry a better understanding of the opportunities for improved debt management and further support its case with government for assistance in tackling the debt problem.
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This partnership illustrates the power of Equifax data, and levels of credit and analytical expertise'.
The water industry faces an ongoing challenge in tackling the issue of bad debt and tracking non-payers.
Unlike other utility providers, a water company cannot disconnect a water supply, and has limited recourse in dealing with non-payers.
As a result, non-payment has become a serious issue for the industry.
The twin objectives of the UKWIR research are to inform the water companies about the nature of their debtor files so that they may adopt the best available recovery approaches and, at a national level, to help the industry to lobby regulators and government for extra powers in debt recovery.
The initial Equifax research revealed that, despite robust collections performance across the industry, a surprising number of customers with otherwise good payment habits were slow in paying their water bills.
They appeared to pay only when pushed rather than being unable to afford to pay.
Equifax also substantiated that younger customers were more likely to be debtors than older generations, giving concern for potential future growth in debt levels.
Many of the debtors also had significant debts elsewhere and were obviously juggling limited and strained resources.
In addition, the research revealed that people who live alone are more likely to be debtors than couples, with women living alone showing a surprisingly high level of bad debt risk.
Drawing from the initial analysis, Equifax recommended that the water industry continue to develop and adapt collection strategies based on an individual's ability to pay.
Equifax also demonstrated that early risk assessment, prior to non-payment, could aid water suppliers in knowing how to bill and manage their customers.
In addition, increased focus on customer relocations would reduce billing errors and enable new customers to get into the payment habit soon after moving in, before a debt has had time to build up.
With its comprehensive databases and analytical expertise, Equifax was able to help the water industry better understand and profile its own debtor data, building the foundations on which further industry research can now be conducted.
Mike Farrimond, Director of UK Water Industry Research, says, 'We chose Equifax to undertake this research project, following successful completion of the first research study.
The breadth and depth of the Equifax data, combined with the company's proven analytical capabilities, are helping the water industry to better understand the issues facing customers who fall into arrears and, thereby better manage its bad debt and back up proposals to government aimed at assisting companies and customers alike.'.
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