Yorkshire Water late payers who miss bill payments could find it harder to take out loans or credit cards following a deal struck between the utility provider and credit reference firm Experian.
Yorkshire Water has become the first supplier to join Experian’s Credit Account Information Sharing service, meaning customers’ payment histories and debt details will be shared with lenders, credit card companies and telecommunications providers.
While those with a good track-record of paying their bills on time will boost their credit scores, those who have not always paid on time or are in arrears will see their scores worsen, making it harder to be approved for credit, and less likely they will get the best interest rates.
Yorkshire Water in turn will get access to their credit histories when they open a new account, which it says will help ‘tailor services to each individual’ so it can identify the ‘early signs’ that signal a customer is getting into financial difficulty.
Jonathan Harding, head of customer service from Yorkshire Water, said: ‘With increased financial strain on households, there is an increasing need for us to understand and gain insight into those customers who are facing financial hardship.
‘Putting in place the tools to share data and utilise credit information, will help provide a reliable early warning of customer behaviour and how that might play out over time.
‘It will also make us better placed in the utilities sector to understand our customers and adapt effective payment plans to ensure our customers are being treated fairly and that we are responding to individual circumstances and needs.’
It is estimated that unpaid bills cost the water industry £329million in 2010/11 in arrears written off by the main utility companies.
Yorkshire Water has said its average annual water and sewerage bill will rise from £356 to £368 for 2013/14, with those on water meters seeing their bills rise by 22 per cent, and those without meters – who are billed on the rateable value of their property – will see a 14 per cent rise for their water.
The firm has a ‘Resolve Scheme’ in place which assists customers on low-incomes who are having trouble paying off their bills, allowing them to repay their arrears over the space of a year.
Paul Vescovi, managing director of Experian’s credit services for the UK and Ireland, said: ‘The potential financial benefit that can be derived from Yorkshire Water taking the lead in using full CAIS data is significant.
‘By sharing information on all customers, including those who may be experiencing difficulties, it will not only reduce bad debt but ensure that customers are treated fairly and responsibly.
‘Importantly, the information shared by Yorkshire Water will also help other credit providers get a comprehensive view of their customers’ financial commitments, supporting responsible lending across the financial services industry.’