July 14, 2004
To: NTDE Board of Directors
A $1,400,000 Telecom bad debt was settled and paid within 48 hours as a result of a NTDE listing. The customer chose to make immediate restitution because new and unrestricted telecommunication service, with a different carrier, was in consideration. NTDE provided the central source of aged write-off information and was the link that propelled satisfaction of a major debt. No other credit-reporting source had this significant information.
This information is based on my experience. NTDE has consistently been the most accurate and propelling source for telecom high-risk information. In the 3 ½ years that I have been using the database I have only seen one adjustment to the information presented. The power of the accuracy and definition of the high risk through NTDE is respected by my company and has always been a key element of our interpretation of risk assessment.
Via the database, the communications among NTDE members who share this type of significant derogatory information is exceptional. This commonality of financial risk concerns is promoted and enabled by and through NTDE.
Below are some of the specific benefits our Credit Department has experienced with the NTDE service:
The primary benefit of NTDE participation is the identification of higher risk accounts. Knowing that a company left a telecom receivable open with another carrier is an indicator of the character and creditworthiness of a business. There is a difference between settling a debt to a mutually agreed position versus refusing to pay for service and leaving the debt behind. We, with confidence, are able to initiate various internal processes that help to monitor the customers’ performance on a more demanding basis when appropriate. Examples would include Credit Limit restrictions, Terms variations, Contractual flexibility, and Past Due tolerance.
While a NTDE hit does not set policy for a company, it generates an initial orientation for protection. A hit provides some general credit insight to initiate a level of protection until the business relationship has a chance to mature and the customer demonstrates financial attention to debts owed.
Dollar amount and number of NTDE hits clarify the expected course of business for a customer. While one small NTDE hit might not raise serious doubt about the ability of a company to pay, multiple NTDE matches and/or debt amounts that are substantial, point to a company’s inability to manage financial resources and a direct unwillingness to pay debts.
Information verification. There have been a few circumstances where our records had multiple addresses, and one of these addresses connected with a NTDE hit. This helped us to verify some general customer data with confidence and close the gap on questionable contact information.
We have been able to collect debts that would not have been otherwise collected had it not been for this NTDE negative database information. Other creditors have utilized the same NTDE source in determining the need to hold some sort of security deposit, and this has brought old customers back to our front door to settle/resolve the listed debt. I am also aware of other NTDE users who have had customers contact them and settle debts as a result of our identification of a debt that was left owed. The highest amount settled with another telecom of which I am personally aware was just under $2,000,000. My company has benefited several times, including one recovery of around $500,000.
The debt listed in the NTDE database has a greater credibility than amounts displayed as owed from other credit reporting sources. Customers rarely argue with NTDE-reported debts.
NTDE provides fast access to significant information. The process to check the database is Internet-easy.
Please feel free to share this information with any individual from a company who may be considering membership in the NTDE.
Bill Hodgson, CCE
Sprint Credit Analyst
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