Helping the Utilities Sector save over £3 million in just 3 months by cutting fraud
The UK boasts a highly efficient and successful water industry, one that leads the way in research, training and accessing new water sources.
Providing essential energy, water, sanitation and drainage to all households, businesses and organisations up and down the UK, the social responsibilities of utility providers are paramount.
As part of their social obligations, all providers offer social tariffs to ensure domestic customers have access to a discounted service should they be struggling financially.
This significant payment reduction is a lifeline for those who genuinely need it, protecting them from entering debt and ensuring continued provision of such essential services.
However, these social tariffs can be abused and many customers are mistakenly or fraudulently receiving reduced charges when they are not entitled to them.
A PROBLEM FOR PUBLIC SERVICE PROVIDERS
To identify the scale of this problem Synectics Solutions worked with Sagacity and a number of the UK’s water companies in 2019 over a period of three months. The water utility providers it worked with covered rural and inner-city areas of the UK.
Each of the companies in the pilot were experiencing problems such as:
Customers dishonestly obtaining discounted services
Failing to declare residency to avoid paying for their service entirely
Declining to update their provider when their circumstances changed
Without the intelligence in place to flag these potentially fraudulent claims or errors, these companies were exposed to considerable fraud and error and millions in lost revenue.
The method that these organisations were deploying previously to address this problem involved using credit reference agency (CRA) data.
The annual cost of these procedures for each company was several million pounds annually, and yet the problem continued to be an issue.
"One of the reasons this fraud was not being identified through these measures was because a customer’s claim for a discounted service, or a zero-rated account, cannot be accurately verified through credit reference agency matching alone.”
“This process in isolation doesn’t provide the data landscape needed to find the explicit qualifying criteria to confirm a genuine claim.”
A POWERFUL PARTNERSHIP IN FRAUD PREVENTION
To address this problem Synectics Solutions and Sagacity worked with the UK Government’s Cabinet Office and took the opportunity to use the National Fraud Initiative (NFI) intelligence database to help these companies understand and identify the scope of fraud or error that they were suffering.
The NFI provides an invaluable database of up-to-date insights and offers 19 different data sets against which to match. This vast solution has already helped over 1200 public sector organisations to identify over £1.7 billion in savings from fraud and error.