Prevention or timely intervention, early detection of problematic debts

Detecting payment arrears early to offer help to consumers and prevent larger financial problems. That is the goal of the National Early Detection Agreement. The agreement, which is a result of the new Municipal Debt Assistance Act (Wgs), focuses on collaboration between various parties, including housing corporations, energy suppliers, water companies, and municipalities. The higher goal is to prevent (accumulation of) problematic debts and avoid unnecessarily high costs due to increasing arrears. Of course, it also limits the debtor risks of the involved parties if timely intervention occurs with consumers who have payment arrears. In this blog, we explain how early detection applies to energy suppliers and how Payt supports the automation of this legally required process.

When are you required to register customers for early detection?

Energy suppliers, including energy resellers, are involved in the National Early Detection Agreement. They have a role in identifying payment problems and passing this information to the relevant municipality so that appropriate help can be provided. Energy suppliers are required to register customers for early detection in certain situations. There are several situations in which an energy customer must be registered:

1. Payment arrears: If a customer has a payment arrear on their energy bill, the energy supplier can register this customer for early detection. This can occur when there is a certain period in which the payment has not been received.
2. Repeated payment problems: In some cases, an energy supplier may decide to register a customer for early detection if there are repeated payment problems, even if the arrear is not yet extremely high.
3. Other signs of financial problems: Besides payment arrears, energy suppliers can also notice other signs of financial problems, such as recurring reversals or irregular payment patterns. In such cases, it may also be considered to register the customer.

There are differences between municipalities regarding the implementation and interpretation of early detection. The National Early Detection Agreement aims to promote collaboration between municipalities, energy suppliers, and other parties, but the specific implementation can vary per municipality. Municipalities have the freedom to determine their own policy regarding early detection and can apply additional criteria for providing help to consumers with payment arrears. As a result, procedures and priorities may vary, even if the general principles of early detection are followed.

Where does early detection take place?

Early detection by energy suppliers at municipalities takes place via BKR or Inforing. The Credit Registration Bureau (BKR) and Information House Energy (Inforing) both play a role in managing and exchanging financial data, albeit in different areas.

The Credit Registration Bureau (BKR) is mainly known for keeping credit information about consumers. It registers loans, credits, and payment arrears. Information House Energy (Inforing) is an organization involved in managing energy data and information exchange within the energy market in the Netherlands. In the context of preventing problematic debts, energy suppliers can share information with municipalities via BKR or Inforing. This information includes payment arrears and other relevant data. In summary, both BKR and Inforing play a role in facilitating the exchange of financial information, albeit in different areas. BKR focuses on broader financial data, while Inforing is specifically focused on the energy sector and the exchange of information to intervene early in payment arrears. The National Early Detection Agreement promotes collaboration between these different parties to prevent problematic debts.

Provided information and privacy

The data that an energy supplier shares with Inforing or BKR in the context of early detection relates to payment arrears and the customer’s financial information. The exact information shared can vary, but it generally includes data relevant to identifying payment problems. Here are some examples of data that may be shared:

It is important to note that the sharing of this data takes place in accordance with privacy legislation, such as the General Data Protection Regulation (GDPR). Energy suppliers must handle personal data carefully and ensure that they comply with legal requirements regarding data protection and privacy. Customers have certain rights regarding their data, such as the right to information and the right to object to its processing.

Privacy is, of course, an important aspect when dealing with financial data, including the early detection of payment problems. Regarding the early detection of energy customers, there are some key points related to privacy:

• Consent:

In many cases, the sharing of financial information, including registration for early detection, can take place based on the customer’s consent. This means that the customer must agree to share his or her data, i.e., can prevent information from being shared with the relevant municipality.

• Right to information:

Customers have the right to be informed about how their data is used and with whom it is shared. Energy suppliers must be transparent about their procedures regarding early detection.

• Right to object:

Under the GDPR, consumers have the right to object to the processing of their personal data. If a customer does not want to be registered for early detection, he or she can express this and object to the sharing of financial data.

It is important to note that early detection is used to help consumers prevent larger financial problems. However, if a customer has objections to registration for early detection, it is advisable to contact the energy supplier directly to express this and discuss the possibilities.

Long-term illness

When an energy customer is long-term ill and therefore has difficulty paying energy bills, there are several steps that can be taken to address this situation:

It is important that the customer informs their energy supplier of the situation. Many energy suppliers have specific procedures for customers who are temporarily or long-term unable to pay their bills. In some cases, the energy supplier may request a medical certificate to confirm the long-term illness. This can help in understanding the customer’s specific circumstances. Energy suppliers can offer arrangements and support to customers who are long-term ill and experiencing financial problems. This may include setting up payment arrangements or providing information about available financial assistance.

Customers who are long-term ill may also be eligible for support from the municipality. Municipalities often have programs for debt assistance and social services that can help with financial difficulties. Data related to a customer’s health falls under sensitive personal information. Energy suppliers must handle this data carefully and ensure compliance with privacy laws.

Support from Payt in early detection

As a provider of debtor management software, we have the best insight into payment arrears and a lot of data relevant to early detection. Payt’s digital communication tools for invoice sending and follow-up are ideally suited to carry out the necessary processes around early detection. Think, for example, of specific email templates to explain the process around early detection and announce the early detection. And the ability to digitally block the transmission of early detection as a consumer. All kinds of things that would be very labor-intensive if done through manual processes such as service desk calls and contact forms.

Payt makes it possible to automatically offer the relevant data we have received from the billing and accounting system to BKR or Inforing in the event of payment arrears of private customers. We also maintain contacts with both parties ourselves so that the exchange remains up-to-date in the event of technical changes at both organizations. This way, we make a fairly complex process manageable again for an individual energy supplier and/or its resellers.

Want to know more about the possibilities of Payt for the energy sector? Schedule an online demo with Payt.