Fraud is a serious problem in the energy industry. For example, here’s a Facebook post from one fraudster selling CPN packages (i.e. synthetic fraud) for “gas, lights, and cable” in all states:
Pinned Facebook post from a CPN (fake SSN) seller who explicitly advertises energy approvals in all 50 states.
Certain companies have a team of fraud experts monitors the dark web and other channels used by fraudsters, and we see these types of ads all the time.
But fraud prevention has long been seen as a delicate balancing act. Reducing fraud risk has often been synonymous with losing signups, and for good reason: many traditional fraud risk solutions catch lots of “good” customers in the crossfire as false positives.
But more accurate fraud and risk tools can make striking the balance much easier. And for many energy providers, this means that the right tool can not only reduce fraud losses, it can also become a customer growth engine.
How to drive customer growth through fraud prevention
Helping energy partners adopt a growth-focused fraud strategy is important. Certain companies’ work with energy retailers and providers across the country, they’ve found that for most partners, the accuracy of fraud risk solutions allows them to deliver significant ROI almost immediately, because in addition to more accurately catching fraudsters at the point of application, also flagging fewer good applications, allowing them to proceed through the signup process and generate growth for our partners.
Of course, every company is different, and you shouldn’t them at their word! To all prospective partners, get a free data test on labeled, aged data to generate the optimal score thresholds for your company, maximizing signups while minimizing fraud losses.
When you provide information about customer LTV or net margin assumptions, companies can also use this data to tell you precisely the value they can offer in terms of revenue from increased signups. This can be done by analyzing declined applications that were actually low risk, and ensuring we account for false positives in our fraud strategy recommendations.
Given channel data, they should be able to help a partner refine their fraud strategy further by determining the appropriate threshold for each channel. Particularly in the energy space, fraud risk varies by channel, and comprehensive fraud tests can provide valuable insights into customer risk across channels. These insights can enable the creation of nuanced approval policies, allowing our partners to onboard more legitimate customers with confidence.
Fraud management can be a driver of growth
Fraud management should no longer be seen as a cost center. By embracing a well-rounded fraud strategy and focusing on incremental approvals, organizations can gain a competitive advantage that allows them to unlock growth while managing risk.
Are you ready to transform your fraud prevention approach? Let’s start the conversation today!
By: Kelley Byrnes, Industry Principal, Sentilink
