Bill shock! - Customer complaints down, satisfaction up

How many times have you found your bills confusing, overloaded or simply inaccurate ? Have you ever had problems paying, or been unclear about how to switch suppliers ? Billing problems are a major cause of complaints made to utilities and utility industry ombudsmen.

While the market has never fully addressed this failure itself, an International Standard ISO 14452, Network services billing - makes billing clearer, more customer friendly and better all round.

Against a background of market failure to resolve ongoing billing issues, and following related surveys, the ISO Committee on consumer policy (ISO/COPOLCO) stepped in. ISO/COPOLCO’s working group on consumer protection in the global marketplace highlighted a need for an International Standard on this critical consumer matter. 

The Standard on network billing, ISO 14452, covers the following utility network services: electricity supply; gas supply; water; sanitation; district heating; and communications.

ISO 14452 provides a market based, market sensitive way of dealing with customer concerns about billing.

The problem

Customers often experience problems such as :

• Bill shock
• Bills that are complicated, overloaded with information and confusing
• Unclear pricing
• Inaccurate bills
• Difficulties with payment methods
• Unclear information on offers and how to switch suppliers.

Billing problems occur for many reasons. These include :

• Poor pre-billing processes, for example in customer service, tariff and data management, meter reading and informing customers about billing
• Unsatisfactory billing procedures and practices, leading to delayed or inaccurate bills
• Poorly presented, unclear bills and statements
• Ineffective post-billing processes to deal with disputes and inquiries, payment and debt collection, vulnerable consumers and final bills for customers changing supplier
• Inappropriate customer expectations, based on confusing advertising or promotional materials, and on complicated tariffs.

Restoring confidence

Clearer bills help customers verify the accuracy of charges and make them more confident about their bills and their supplier’s performance. In competitive markets, this also helps customers to choose the best and most suitable supplier.

Utilities benefit from ISO 14452 too - for a start, they should receive fewer complaints. This reduces their operating costs, improve debt recovery, and increase customer satisfaction and loyalty.

In addition, by using a common International Standard and billing practices, multinational utility companies can reduce their costs.

ISO 14452 helps utilities ensure that they provide their customers with clearly comprehensible, accurate, timely and complete bills, giving them enough information to verify their charges. In this respect the standard :

• Defines the minimum requirements for billing and payment collection
• Prevents or reduces complaints by tackling key issues
• Ensures that suppliers assist customers by billing appropriately and consistently
• Creates and sustains a fairer, longer-term supplier-customer relationship
• Provides benchmarks for customer expectations
• Allows for the implementation of smart metering technology and the provision of improved customer information
• Facilitates innovation in billing, enabling suppliers to differentiate their services.

The solution

ISO 14452 is aimed at utility bills which include an element of metered or measured consumption. However, many of its key principles apply to all forms of billing and the standard states that suppliers should adopt its requirements even if usage is not metered or otherwise measured.

Happy customer
Regional or national factors may require the standard to be adapted to meet prevailing cultural, social, economic, regulatory and even climatic conditions.

ISO 14452’s scope specifies minimum billing requirements for all consumption-based utility network services to domestic customers. This includes the processes required to produce the bill and address any issues after it has been sent out. It also provides guidelines for the content of the billing document or statement.

The standard applies to services which are unmetered, metered at the point of delivery, or metered remotely (for example at the supplier’s own premises). It covers any unmetered or unmeasured charges appearing on the same bill as metered or measured charges, as well as flat-rate charges.

The standard does not cover pricing, except as a requirement to provide information to customers. It applies only to billing for consumption-based utility network services, and to all bills or statements for such services in which there is an ongoing supplier-customer account relationship, regardless of the payment method used.

The scope of the standard includes: bills for metered consumption; bills where a formula is used to estimate consumption (for example, water bills based on the number of persons per household or the size of the house); and flat fees charged regardless of consumption (for example, telephony or internet bills where the tariff allows unlimited usage).

It also applies to pre-payment customers where a supplier bill or account is needed for the customer to reconcile the amount paid in advance with the cost of consumption ; or where the customer expects to receive a bill based on point of sale or other advertising (for example, mobile telephony and energy metering) in which codes, keys, electronic dongles or electronic cards are used to load and reload the service and to indicate what was purchased.

The standard does not cover unbilled services (mobile telephony paid for by pre-purchased SIM cards that are unmetered, for example) and unbilled services funded directly by the taxpayer.

Full coverage : pre- to post-billing

ISO 14452 sets out specific requirements for pre-billing processes ; the production of the billing document ; and for ensuring that issues arising after the bill has been sent are resolved to the customer’s satisfaction.

Pre-billing issues covered include :

• Data standards
• Meter readings and other data used to calculate charges
• Definitions of products/services
• Provision of additional information required by customers
• Changes of a significant nature.

Billing principles covered include timeliness ; accuracy and reconciliation ; and the bill validation process.

The bill is the prime means for the supplier to receive payment and may also be the main way for customers to view their consumption and price paid. While the standard acknowledges that bill design and layout is a matter for each supplier, it sets out a list of general principles to ensure that all bills are clear and understandable. On the first page, fundamental information should appear prominently and include details of the supplier and customer, usage, payment and tariff; other charges; and general messages.

In addition to specifying requirements for the format and delivery of bills, the standard includes recommendations for annual statements.

Among the post-billing processes covered are billing disputes and enquiries, payment methods and processing, debt collection and helping customers who are struggling to pay their bills.

Putting customers first

The standard recognizes that effective policies and procedures are needed to identify and then manage the needs of vulnerable customers. Procedures include detailed guidance to help staff to identify vulnerable customers and ensure that specialist support is provided when a customer cannot understand advice given or take the necessary action.

Processes exist to ensure that customers can contact their supplier easily, make complaints and obtain appropriate redress where necessary.

In competitive utility markets it is also important that customers can easily end the contract and/or switch suppliers. The standard ensures there are no unnecessary barriers to switching and that transfers are completed within agreed timescales.

Finally, ISO 14452 also stipulates that compliance and continual improvement systems need to be developed and implemented. This is to ensure that billing procedures are regularly reviewed and updated to reflect customer feedback and external best practice.

Reference: ISOorg