There were several IT Hiccups to choose from last week. Among them were: problems with the Los Angeles Unified School District’s fouled up new student information and management system that are so egregious that a judge ordered the district to address them immediately; and the UK Revenue and Customs department’s embarassing admission that its trouble-plagued modernized tax system has again made multiple errors in computing thousands of tax bills. However, the winner of this week’s title as the worst of the worst was an oofta by Duke Energy, the largest electric power company in the U.S. Duke officials apologized in a press release to over 500,000 of the utility’s 800,000-plus current and former customers (including 5,000 non-residential customers) across Indiana, Kentucky, and Ohio for erroneously reporting them as being delinquent in paying their utility bills since 2010.
Duke Energy admitted that the root cause of the problem was a coding error that occurred when customers opted to pay their monthly utility bills via the utility’s Budget Billing or Percentage of Income Payment Plan Plus (in Ohio only). A company spokesperson told Bloomberg BusinessWeek that while customers were sent the correct invoices and their on-time payments were properly credited, the billing system indicated that the customers’ bills were paid late.
As a result, that late payment information for residential customers was sent by formal agreement to the National Consumer Telecom & Utilities Exchange (NCTUE). The NCTUE is a consortium of over 70 member companies from the telecommunications, utilities and pay TV industries that serves as a credit data exchange service for its members. Holding over 325 million consumer records, NCTUE provides information to its members regarding the credit risk of their current and potential customers. For non-residential customers, the “late payment” snafu had worse consequences: the delinquency reports were sent to the business credit rating agencies Dun & Bradstreet and Equifax Commercial Services.
Duke Energy’s press release said that the company “deeply regretted” the error that has effectively trashed the credit scores of hundreds of thousands of its residential and business customers for years. The utility says the erroneous information has now been “blocked” for use by the NCTUE, Dun & Bradstreet and Equifax, and it has dropped its membership in all three.
The press release mentioned that the company is still investigating whether additional customers who had “unique” billing circumstances were affected by the coding error.
But what the written statement failed to mention is that the utility found the error only after a former customer discovered that she was having trouble setting up service at another NCTUE utility member because of a supposedly poor payment history at Duke Energy. After contacting Duke Energy and asking why she was being shown as a delinquent bill payer when she was not, the utility realized that the woman’s erroneous credit information was only the tip of a very large IT oofta iceberg.
While Duke Energy claims that “we take responsibility” for the error, it is being rather quiet about explaining what exactly “taking responsibility” means for the hundreds of thousands of customers who may have been unjustly financially affected by the erroneous information sent to the three credit agencies over the past four years. It wouldn’t surprise me to see a class action lawsuit filed against Duke Energy in the near future to help the company gain greater clarity on what its responsibility is.
In Other News…
Robert N. Charette is a Contributing Editor to IEEE Spectrum and an acknowledged international authority on information technology and systems risk management. A self-described “risk ecologist,” he is interested in the intersections of business, political, technological, and societal risks. Charette is an award-winning author of multiple books and numerous articles on the subjects of risk management, project and program management, innovation, and entrepreneurship. A Life Senior Member of the IEEE, Charette was a recipient of the IEEE Computer Society’s Golden Core Award in 2008.