Today’s blog post draws from my popular Improving Revenue Collections for Utilities presentation.
Let’s examine some best practices when taking an application for service.
Require a copy of rental agreement or closing documents
Requiring applicants for service to provide a copy of their rental agreement or closing documents helps ensure they are indeed the occupants or owners of the property. Remember, one of the objectives of having a Red Flags Rule policy is to prevent and mitigate identity theft.
As I discussed in a previous post about deceased customers, a utility bill can be used as proof of identity. In fact, with today being Election Day, this website points out a utility bill is an acceptable form of ID for first-time voters.
List all names on the rental agreement on the service application
Have you ever been faced with a situation where you disconnected a customer for non-payment only to have someone else who you are pretty sure is living there come in to apply for service? If so, you can avoid this situation by requiring everyone over the age of 18 who will be living at property to be listed on the service application.
Be sure to also record each applicant’s identifying information – social security number, driver’s license number, and date of birth.
Require a photo ID for each applicant
The best way to ensure that an applicant for service is who they claim to be is to require them to provide photo ID. Ideally, your billing software allows you to attach scanned images, so you can attach a copy of the applicant’s photo ID. This can come in handy later if there is ever a question if someone is who they claim to be.
Also, be sure to get a copy of the photo ID for each applicant who is listed on the service application.
Perform a bad debt search for each applicant
Another best practice is to perform a bad debt search for each new applicant for service. Customers who left an unpaid final bill may try to move back to your service area and apply for service using a fake name. Searching for bad debt using the applicant’s social security number, driver’s license number, and date of birth is the best way to catch someone attempting to use a fake name to avoid paying previous bad debt.
Ideally, your billing software performs this search automatically as part of the application for service process. But if it doesn’t, it’s still worth taking the time to manually perform the search for each applicant.
Charge an application fee
Utility fees are based on the concept of user fees – they only apply to customers who incur the fee. For example, you only charge a returned payment fee to customers whose paper checks or echeck transactions are rejected by their bank. Likewise, you should charge an application fee to customers applying for service, as outlined in this blog post.
From the 2023 Utility Fee Survey, just over 50% of responding utilities charge an application fee, so this is an area of possible growth for many utilities.
Print an application form that the applicant(s) sign
Finally, I recommend printing an application form with the customer’s relevant information and a paragraph or two outlining the policies your applicants are agreeing to. Even if such a form isn’t legally binding in your state, by requiring applicants to sign the form, it causes them to think twice about abiding by your policies.
Are your service application policies up-to-date?
Are your office service application policies up-to-date? If not, or if you aren’t sure, please give me a call at 919-673-4050 or email me at gary@utilityinformationpipeline.com to learn how a business review can help you find out.
© 2024 Gary Sanders