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Number trap laid for bill dodgers
- Cellular service providers, CII to help set up data pool on defaulting customers

Calcutta, Nov. 9: Compulsive bill payment defaulters had better watch out. The system is getting ready to strike back.

Banks, credit card issuers and cellphone companies are trying to forge a grand alliance to ferret out those who welsh on their payments.

Delinquency in bill payments is a big headache for companies that bill their customers every month. It’s only now that they are getting ready to pool their data on delinquency to quell a growing problem.

The Indian Cellular Association (ICA) has teamed up with the Confederation of Indian Industry to draft a proposal that will safeguard the interests of service providers and make it mandatory to share data on defaulting or delinquent customers.

The team will try to introduce a social security or common tax number with an IP (internet protocol) backbone that will make it easy to track down the artful dodgers.

CII will also propose the establishment of a commission or authority with civil and criminal powers to deal with default cases.

How will the system work' Here’s how: the first question that will be popped when you apply for a loan, new credit card or a cellphone connection will be — “What's your number'”

Once that common tax number is with the service provider it won’t be hard to track down the defaulter. And the consequences of delinquency could be very harsh.

For instance, if you fail to pay your cellphone bill, you could find your loan application becoming stuck and your credit card suspended.

It’s still a pie in the sky at the moment. The concept note on prevention of consumer delinquency proposes a common platform for all major service providers, including cellular, credit card companies, insurance players and the finance sector.

“It is widely known that growth in the service industry is throttled because of the fear of high delinquency. We do not have adequate laws to protect the interests of service providers in India,” says Pankaj Mohindroo, national president of ICA.

At present, the service industry hardly shares any data on delinquent customers. This makes it easy for a defaulter to move on from one service provider to another, without the fear of being brought to book.

While the default rate for credit cards is estimated at 6 per cent of the total outstanding, cellular service providers put the rate at anywhere between 3 to 5 per cent of the industry turnover. With at least four cellular operators in major circles, defaulters find it easy to flit from one service provider to the other and still stay connected.

“A user can be traced with the identification number and in case of default in any one service, access to other services can be stopped,” Mohindroo added. “A positive move to protect the interests of service providers will help reduce acquisition costs and thus lower entry barriers for customers. This will result in market expansion.”

However, Pradip Baijal, chairman of the Telecom Authority of India, feels that the risk of default is par for the course.

“Delinquent customers are not a priority issue for us. It is a problem that has to be tackled by the industry. We will provide whatever support is required,” he said.

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