Title: Lauren Foley
1Building performance measures into your
partnership with collection agencies AGA/EEI
Customer Service Conference Philadelphia, PA
- Lauren Foley
- Division Head, Customer Service
- April 9-12, 2006
2 WGL PROFILE
- Our Service Territory includes Maryland, Virginia
and the District of Columbia - Over one million customers with four percent
annual growth - 17 in DC 38 MD 45 VA
- 93 Residential (75 of ) 7 Commercial
3 WHAT IS THE PROBLEM?
- An Increase in Uncollectible Accounts
- Impact from volatile wholesale prices
- The effect from customer meter growth
- Lack of adequate security deposits
- Ineffective OCA management
4 PRIOR OCA Management
- Washington Gas utilized two OCAs for over 25
years - Improvement was needed in the following areas
- Reporting
- Lack of effective reporting received from the
agencies - Reporting to Credit Bureaus
- Measurements
- Lack of performance metrics
5 PRIOR OCA MANAGEMENT
- Technology
- No access to the Agencys system.
- Lack of ability to recall accounts from primary
placement and refer to secondary OCA - Agencies had minimal/dial up access to our
system. - Paper driven processes for placement of accounts,
invoicing and payments.
6 NEW OCA SELECTION PROCESS
- Due Diligence
- Formal bid process in conjunction with the
Procurement, Legal, and the Finance areas. - Decision Matrix
- Technology/Daily Operations
- years using Predictive Dialer
- size of IT staff
- remote access
- file transmission
- electronic invoice and payment
- customized reporting based on WGs needs
- web-based
- recorded phone conversations
7 NEW OCA SELECTION PROCESS
- Due Diligence, contd
- Previous Utility Experience/Reference Check
- list of five minimum utilities as a reference
- used formal performance evaluation form
- Pricing
- pre-collect
- primary
- secondary
- legal
- warehousing
8 NEW OCA SELECTION PROCESS
- Due Diligence, contd
- Facilities/Collectors
- total of collectors - utility collectors
- location of collectors
- ratio of collectors to accounts
- ratio of supervisors to collectors
- recovery ratios
- offsite recovery location
9 NEW OCA SELECTION PROCESS
- Due Diligence, contd
- Insurance/Bonding Requirements
- performance guarantee
- Volume
- number of outstanding accounts and balances
- Financial Review
- audited financial statements for three years
- SAS 70
10 NEW OCA SELECTION PROCESS
- Due Diligence, contd
- Other Influencing Factors
- responsive
- transparent
- low maintenance
- high interest - representation to the team
- IT (in-house)
- fines
- minority owned status
11 PROCESS IMPROVEMENTS
- Contract was signed for two years with three
OCAs agencies that included the following terms
and conditions - General nature of the contract
- Referral process
- Reporting accounts to credit reporting agencies
rules - Payments processing procedures
- Legal action authorization
12 PROCESS IMPROVEMENTS
- Contract contd
- Bankruptcies
- Recall and cancellations process
- Reporting requirements
- Price and payment schedule
- Term and Termination
13 PROCESS IMPROVEMENTS
- Contract contd
- Warranties Licenses, compliance, QA
- Insurance and credit security
- Indemnity
- Relationship of parties
- Confidentiality
- Audit
14 PROCESS IMPROVEMENTS contd
- Performance Measures Scorecard Champion /
Challenger - Recovery performance is measured monthly based on
placement date - Formulas used to calculate percentages collected
are
15 PROCESS IMPROVEMENTS contd
- Performance Measurements (contd)
- Incentive based reward program in place to
maximize agency performance. - Incentive reward is based on six-month net
recovery average. The average is determined by
the three agencies collections for that period. - Any agency that falls 10 below the net average
recovery will have its placement referrals
reduced. - The top performer will receive an increase in
placement referrals. - Agencies receive monthly collection/recovery
scorecard
16 PROCESS IMPROVEMENTS contd
17 PROCESS IMPROVEMENTS contd
- Auditing Collection Agencies
- Continuous monitoring of reporting components to
ensure reporting is effective - On-site visits to the agencies to monitor
collection practices and to ensure compliance
with Fair Debt Collection Practice Act - Periodic meetings with agencies to set
expectations and to resolve any issues or
concerns.
18 PROCESS IMPROVEMENTS contd
- Auditing Collection Agencies
- Audit program outline (planning, Field work, and
reporting). Specific audit procedures includes - Reviewing written policies and procedures
- Training program
- Quality assurance / control program
- Physical access control
- Inventory reconciliation
- Staffing level and working hours
19 PROCESS IMPROVEMENTS contd
- Auditing Collection Agencies
- Timeliness and accuracy of loading referred
accounts - File scribing and skip tracing procedures
- Dunning notices
- Call monitoring and recording
- Payment arrangements/ broken promises
- Settlements
- NSF/Returned items processing and fees
- FDCPA compliance
20 PROCESS IMPROVEMENTS contd
- Auditing Collection Agencies
- Reporting accounts to credit reporting agencies
- System Controls Dialer, Logical access and
disaster recovery plans - Insurance requirements
- Trust account review
21Questions