Utilities Get Creative to Collect Bills

VedomostiSlobodin approvingly cited a system in which debtors’ portraits were posted under the words “Hanged as Promised.”

Utility companies are having to get creative to find ways to collect payment for electricity and heat as consumer debt grows and winter approaches.

In addition to using debt-collection agencies, the utilities are having to act as court marshals themselves, and even going as far as publicly shaming offending consumers.

“We give out information on our debtors to the local television station, and they read it to their viewers in the news,” the Tver electricity sales company’s Natalia Yefimova said. “It does work.”

The Market Council, the electricity industry watchdog, estimated that the sector’s overall debt stood at 33.1 billion rubles ($1.1 million) of as of Sept. 15 because of rising unemployment and falling household income. Market players expect the figure to grow after the heating season begins.

Other firms have become gumshoes, conducting investigations into their customers in order to help out the court marshals.

“There is always a lack of court marshals so we sometimes help them do their work,” said Mikhail Korotkov, a spokesman for Udmurtia Electricity Sales, controlled by IES Holding. “We find out what bank our debtors have an account in so that the court marshals can get the debt money from it.”

“It is legally hard to turn off the power to an apartment in a multistory building, so we have to use other methods,” Korotkov said.

If customers do not pay their electricity and heat bills for more than three months the electricity sales company has a right to sue the debtor.

If the debtor does not pay before the court hands down a verdict, the company can file a suit to the Federal Court Marshals Service, which can seize the debtor’s property or income and prohibit the debtor from traveling abroad until the debt is paid.

“We just turn off the power for those consumers who do not pay for more than six months and we have no problem with that,” said Alexander Shkolnikov, deputy chief executive of Smolensk EnergoSbyt.

IES, which has electricity sales companies in Perm, Sverdlovsk and four other regions, hired a collection agency but refused to work with it because of extravagant methods the collectors used, chief executive Mikhail Slobodin said.  “They plugged the sewerage pipe of a house in which many debtors lived, which, of course, led to a disaster with the whole building,” Slobodin said. “These bizarrely creative people also called people in the middle of the night.”

Slobodin said using court marshals was a safer method. “When they come to the apartment and start taking inventory people tend to magically find money quite quickly,” he said.

Slobodin cited as a success a new system one of his sales companies tested in the Nizhny Novgorod region town of Dzerzhinsk.

The company in August placed portraits of debtors on billboards under the words “Hanged as Promised.” The debtors’ names and the amounts they owed were also written on the billboards.

“All of them gave us written permission to have their portraits hung there,” Slobodin said. “They must have thought they could become famous this way.” The Federal Anti-Monopoly Service said on Sept. 17 that it had opened an investigation into the Dzerzhinsk sales company’s campaign. A preliminary hearing will be held Oct. 14.