Energy and telco retailers.
Energy and telco retailers extend credit to every customer, because the service is used before the bill is paid. But they cannot run credit like a lender: the decision is rarely whether to serve a customer, and almost always on what terms, with what protections, and how to manage exposure that the customer's own usage sets.
What Luminnovate does
- One auditable decision flow at sign up: approval pathway, identity and fraud checks, deposits and payment methods.
- Hardship identified early, and payment plan and collections decisions tested against what you do today: see Hardship and collections.
Solutions used here
Energy retailers
- The twistUnder the national rules, a designated retailer must offer supply under its standing offer, and a residential security deposit can be required only after a payment plan has been offered and declined or not kept. Victoria applies its own code. So the levers are pathways, deposits, payment methods and billing frequency, not approval.
- The decisionsThe sign up pathway; whether a deposit is permitted and appropriate; payment method and billing frequency; when and how to offer a payment plan; collections priority.
- The signalsPayment behaviour against the customer's own history and peers; consumption changes read from meter data; seasonal exposure, since bills swing with weather and prices.
- The risksIdentity fraud to obtain supply; customers who move or switch leaving a final bill unpaid; hardship that is identified too late.
- The rules our clients work underThe National Energy Retail Law and Rules, including standing offers, security deposits and hardship policies approved by the AER; in Victoria, the Energy Retail Code of Practice.
Reasons
| Identity verified against two documents and the connection address | Passed |
| Last utility account closed with a final bill paid late, then in full | Watch |
| Winter bills expected at about 1.6 times summer bills for a home like this | Seasonal |
Protection applied
No security deposit. Monthly billing keeps winter bills smaller, and a payment plan is offered at the first late bill, before any collections step.
Illustrative example with invented data.
Telco retailers
- The twistPlans and device repayments are credit decisions made in seconds at sign up, often online, where fraud and good customers arrive through the same door.
- The decisionsThe sign up pathway and limits for plans and device repayments; identity verification strength; when to step up checks; hardship and payment arrangements; collections priority.
- The signalsPayment behaviour against the customer's own history and peers; changes in usage and account activity; patterns across applications that suggest identity fraud.
- The risksIdentity fraud to obtain devices; account takeover through SIM swap and number port out, which feeds wider scams; hardship identified too late.
- The rules our clients work underThe Telecommunications Consumer Protections Code, ACMA's financial hardship standard, and the Scams Prevention Framework, which covers telcos as well as banks.
Reasons
| Broadband bills paid on time for 18 months | Good |
| Delivery address differs from the billing address | Step up |
| No recent SIM swap or number port out on the existing account | Passed |
Protection applied
A one time code to the existing number and a document check before the handset ships. A repayment limit set at sign up, and a hardship conversation offered at the first missed repayment.
Illustrative example with invented data.
What we can show today
The decision, monitoring and testing methods are the ones used across our lending work, shown in Insights. The engine has also been applied to energy consumption data. We do not yet have energy or telco credit results to publish.
- Which hardship plans holdReal lending data from an open research dataset
A back test of one decision on your own history, such as your deposit and payment plan rules or your sign up identity checks, run alongside what you do today.
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