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Utility Bills A Low Priority for Money-Crunched Consumers    
Industry News
 
Of consumers with troubled payment histories, 82 percent decide which payments to make that month – and more often than not, utility companies come out the losers in this decision, according to an analysis of consumer behavior by credit bureau Experian.

Of those consumers with payment problems, 56 percent showed problems only with their utility bills, defined here as telecommunications, cable or energy bills. About 32 percent showed problems only with their bankcards, while 12 percent had payment issues with both, according to the analysis.

“A large number of [utility] delinquent customers actually may have the ability to pay, but they are simply placing their utility bills at the bottom of the priority list, below their credit cards,” says Mike Becker, Experian’s director of Telecommunications, Energy and Cable product marketing in a guest column coming out in an upcoming issue of Collection and Credit Risk magazine. “The consumer’s money is running out before utilities get to the front of the line.”

The analysis also found that delinquent utility customers often have access to alternative sources of credit, which collection managers may be able to tap into.
The study was conducted using September 2005 data of approximately 3.2 million consumers whose credit reports included information reported by telecommunications, energy or cable companies.
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