Do you require new customers to come to your office to apply for service?
Guarding against fraud
Allowing customers to apply for service online is a growing trend among utilities. As we examined in the last Utility Information Pipeline, guarding against fraud in the application process is one of the key components of a Red Flags Rule policy.
Verifying that your customer really is who he or she claims to be is the best way to prevent fraudulent applications. Most utilities do this by requiring the applicant to show photo ID and proof of residency (lease agreement or closing documents) for the address at which they are applying for service.
Why is this important?
If you base the amount of a security deposit on the applicant’s credit score, using a stolen ID could allow a potential bad debt customer to establish service with no deposit.
Additionally, if the applicant is a previous bad debt customer, using a stolen identity allows them to avoid detection of the bad debt when you perform a bad debt search.
Many businesses allow a utility bill in the customer’s name as proof of ID. If someone is able to fraudulently establish an account, they could easily use their bill from your utility to defraud other businesses.
How does applying online change this?
If you allow customers to apply online (as opposed to merely downloading an application form), how do you confirm they are who they claim to be? Sure, they can take a picture of their driver’s license with their smartphone and upload it to your website. But without visually verifying their identity against the driver’s license, how do you know it’s not stolen?
Some utilities will allow customers to apply online, but require them to visit the office in person within the first week of establishing service. By doing so, the utility has the opportunity to scan the customer’s driver’s license and attach it to their customer record.
How do you handle online applications?
How does your utility deal with online applications? Please take this quick poll.
Once you’ve taken the poll, you can see the results to see how other utilities responded. I’ll publish the results in the next issue.
Does your application process need reevaluating?
Does your application for service process still involve handing a new applicant a clipboard to complete a paper application? If so, or if there are other ways you need to become more efficient, please give me a call at 919-232-2320 or e-mail me at email@example.com to learn how a business review could help you evaluate how your office can be more efficient.
© 2016 Gary Sanders