Identifying fraud and verifying tariffs in Utilities to benefit the customer and provider

Tariffs for All Customers

Utilities providers offer a range of differing tariffs to support their diverse customer base. These tariffs cater for customers living alone as well as those who are financially vulnerable. Some providers also offer tariffs or allowances for situational changes at a property for example, one-off payments for long term building works.

Managing the eligibility of customers for these types of tariffs is not only an ongoing requirement but also a difficult undertaking to get right, requiring specialist tools, advanced analytics expertise, and access to specialist datasets.

Fraud and Ineligibility

Often, there are genuine reasons why support is needed that warrant a change in tariff, but there are also many instances of fraud where customers mislead their provider into dispensation based on false pretences. An example Sagacity and Synectics have seen when working with water companies involves the Single Person tariff, a discount for customers that live alone. Through occupier identification, utilising third party reference data, it becomes very clear when there is more than one occupant at a supplied property, thus making the cases in question non-compliant.

This happens, often in water companies, and although some cases are genuine lapses in communication and/or missing updates of data where new occupants replace the previous occupant, there are many instances of fraud where the customer makes false statements of occupancy or household composition.

Fraud cases can also include other tariffs that require the receipt of benefits payments to become eligible. Social tariffs for customers who receive pension credits, state or housing benefit payments are common across the utilities sector but with changes to customers’ circumstances, it can also be common for dispensation to remain in place when it is no longer warranted. Deliberate or otherwise, this impacts the business.

Data Driven Verification to Prevent Fraud and Error

By using a combination of data files linked to extensive analytics, we can identify property occupants, as well as validate those who are genuinely eligible for social tariffs ensuring discounts are not awarded to customers who do not need it. This benefits the provider with the avoidance of leakage through non-compliance and impacts profitability through the removal of ineligible customers from discounted tariffs.

Referencing third party data is critical, as using internal customer data alone may not supply utilities providers with sufficient proof of eligibility. A customer contacting their provider to ask for help is not necessarily enough evidence to suggest they are genuine, so further investigation is often required.

This is irrespective of fraudulent or genuine mistaken cases of tariff ineligibility; ongoing investigation and management is required in order to remain compliant with eligibility rules and to maximise revenue opportunities. Credit Bureau data is often a sound starting point as a picture of the occupant can be established based on their credit profile. However, for the growing number of customers who are struggling financially or those with limited credit footprints, other richer third-party reference data is required.

National Fraud Initiative (NFI) data from the Cabinet Office and supplied by Synectics Solutions bridges the gap when solely using Credit Bureau data.

NFI data gives utilities providers access to information such as Council Tax payments, state benefits and pension credits, among others, which clearly enables the verification of customers who may be misleading their supplier as well as verifying eligibility of those receiving support tariffs.

Without data expertise and access to third party reference data, it is an arduous process for utilities providers to assess customer eligibility, let alone maintain an ongoing truthful picture of genuine customers.

The end results are quickly realised with improved customer satisfaction whilst ensuring a customer’s propensity to pay, ensuring your organisation can effectively support others moving forward.

Customer Stories

To find out how our partnership with Sagacity can help you prevent tariff fraud, identify unknown occupiers and support vulnerable customers, read our case studies below.