Letting agents are being warned that – totally unknown to them – their company’s credit ratings may be badly damaged by tenants leaving unpaid utility bills. Business secretary Vince Cable is being asked to investigate.
Ian Sanford, of Pennington Homes in Huntingdon, Cambridgeshire, discovered the problem after receiving a letter from Anglian Water relating to the office’s own water supply. The alleged debt in question, which the agency knew nothing about, turned out to be just £42.59, and resulted in their credit rating sinking from 87 out of 100 to 25.
The firm knew nothing about any of this when it received the letter, which said that because of Pennington Homes’ poor credit rating, the firm would have to pay a deposit of £300 or the water supply would be disconnected.
Sanford said: “Having been a customer of Anglian Water since 1982 and having paid our water rates half-yearly on time, we thought that there must have been a mistake.
“We contacted Anglian Water to find out what was going on and they told us that they had been advised by credit reference agency Experian that we were ‘high risk’ and any creditors should now take a deposit.
“We asked for a copy of the credit report which they duly supplied and which showed that, because of an alleged unpaid debt, our Delphi score had been reduced from 81 out of 100 to 25 out of 100 and our Days Beyond Terms payment record was now shown as 120 against the industry average of 25.
“We contacted Experian to find out who had supplied the data that had affected out credit score and it turned out to be Anglian Water themselves!
“We asked Anglian Water to supply details of the alleged debt and they advised us that it was a sum of £42.59 which related to five water bills in respect of properties we had managed, the highest being £18.58 and the lowest 0.04p, which went back to 2006!
“Once we pointed out that the debts in question were not actually our responsibility but the responsibility of the appropriate landlords, Anglian Water immediately wrote them off.”
At first, says Sanford, Experian were not prepared to amend his firm’s credit rating and ‘did not accept that there is any need for them to verify whether debts registered against companies are genuine or not but just accept the word of the data supplier who may be acting maliciously’.
However, after strong representations to both Anglian Water and Experian, both have finally agreed to remove the inaccurate data, Sanford told LAT last night.
As a result, his firm has gone from being ‘a high risk company – credit transactions in excess of the limit assigned should be supported by a director’s guarantee’, to ‘a low risk company – no reason to doubt credit transactions to the limit assigned’.
Sanford remains unhappy. He added: “Agents should be aware that a small debt registered against them, which they may not even know about, can have a catastrophic effect on their credit rating. We have written to the business secretary Vince Cable, asking him to investigate, as we believe the present credit rating system is unfair and unjust, and probably contravenes the European Court of Human Rights as far as individuals are concerned.”
Comments
My agency too used to have this problem, however I have discovered a way to limit this problem almost with total sucess.
When a tenant moves in I write to the utility company with a photo copy of the AST and a copy of the inventory meter reading page. Then do the same at the end of the tenancy along with tenants forwarding address
So far only 1 gas suppiler needed this info sent 3 times before they stopped chasing us and pursued the tenant :)
I'm not saying its foolproof but it seems to work, for now.
Following on from my article we have received further information regarding the six bills we were alleged to owe
Anglian Water. It turns out that four of the bills were in our name but sent to a residential address in Wisbech some 40 miles from where we are based! Not surprising they never got queried or paid.
Anglian Water have said that they have cancelled the bills as a 'gesture of good will'. They will need more than that when our solicitor has finished with them!
Like it, JPD. Just tried it out on EDF, who wouldn't answer our call earlier this week despite us hanging on for 20 minutes. All sorted, in 5 minutes via their complaints line.
Something else we've found works very well:
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Dear Sir/Madam
Case reference: [INSERT REF. NO]
You have contacted us regarding the account with the above reference number, which you claim is owed by ourselves.
We would point out that we have no knowledge of any such debt being owed by us to ScottishPower [OR WHOEVER]. The property referred to [INSERT ADDRESS] is a property that is managed by our company and if you/your client wish to have details of the tenancies, along with dates and meter readings, then you have only to contact us in the proper manner.
We are familiar with the Office of Fair Trading Debt collection Guidance which states that it is unfair to send demands for payment to an individual when it is uncertain that they are the debtor in question.
We would also point out that the OFT say under the Guidance that it is unfair to pursue third parties for payment when they are not liable. In not ceasing collection activity whilst investigating a reasonably queried or disputed debt you are using deceptive and/or unfair methods.
Furthermore ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment amounts to physical/psychological harassment.
We would ask that no further contact be made concerning the above account unless you can provide evidence as to our liability for the debt in question.
We await your written confirmation that this matter is now closed.
We look forward to your reply.
Yours faithfully
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We've had this for years. The worst seems to be Scottish Power, but British Gas come a close second.
I've given up trying to sort them out with the accounts people.
Every one now results in us contacting their 'complainrs line'. They don't like complaints (it's bad for their own rating) and I find issues of this type usually get resolved straight away.
The more of us who make complaints, perhaps the quicker they will change the crap system they use.
Often tenants notify the utility company that they are moving out and give my letting agency's details as the forwarding address. We really have to be on the case and act on every bill which lands on our doormat.
Another one we've had occasionally is tenants "accidentally" setting up direct debits and standing orders from our client account. They have the sort code and account number so they can pay rent in, and occasionally the bank will accept a standing order or direct debit instruction from them with nothing more than this.
We reconcile our client account daily so we spot it immediately and the bank reimburse us without argument but its alarming that it can happen in the first place.
Although I agree that it is mainly the Utility Companies at fault (we have now written to them all stating that we will not accept liability for any bills relating to properties that we do not own) Experian also need to look at their own systems. At the moment their analysis of data is so unsophisticated that it does not distinquish between a debt of £1 and a debt of £1000 applying the same criteria in arriving at the Delphi credit score which is obviously ridiculous. For an alleged debt of £42.59 we went from 81 out of 100 to 25 out of 100 (low risk to high risk). Once the inaccurate data was removed our credit rating soared back to 87 out of 100!
Its a regular occurance for us, especially with certain suppliers, to receive bills for properties we have both managed and not, and even for properties in completely different parts of the country that are nothing to do with us! We ensure that the utility companies always have up to date information on tenants moving in and out and who is responisible during for the bills and meter readings. Yet still this happens, and it seems they prefer to take the word of the tenant over the word of the agent.
What really needs looking at is not the credit rating system, but the incompetences of our nations utility companies!
just like japan,people excluded from the fantastic notion of credit
In the end people pay cash at paypoint and use payment plans with no need for credit whatsoever
unfortunately our economy is based around our 'credit score'
when50% of people fail then they will do something!
Its insane. We even tried to pay a bill where a tenant abandoned the property just to ensure continuity, but the utility provider refused to discuss it for 'data protection reasons' and would not tell us what was outstanding. a couple of months later - WE received a summons.
In another case, Tower Hamlets sent us a summons for a property we had NEVER even rented. Their case was based upon a conversation with a neighbour who assumed our board related to the subject property. We allowed it to go to Court and claimed costs.
Its about time the named party on the utility bill was the only person against whom poor credit can be registered - after all, if the utility provider accepts that person as a customer, then they should not expect vicarious insurance from agents.
Well done to Penningtons for raising this issue