Freemans Grattan cuts bad debt with credit scoring system

The business – the UK arm of Otto Group - has deployed KXEN into its credit risk team after three years of using the solution in marketing.

KXEN creates a bad debt propensity scoring by drawing results from internal customer data as well as third party information, allowing the company to predict which customers will default on payments.

Andy Bryan, Head of Customer management at Freemans Grattan Holdings (FGH) said: “We’d used KXEN successfully in marketing for three years and saw no reason to consider a different solution for credit risk modelling.” He added: “The target was to improve our ability to predict which customers would default. The new KXEN scorecard has significantly improved our authorisation process and retrospective analysis suggests we can cut debt by as much as 33%, with only a 3% lower acceptance rate for credit”.

The home shopping retailer has always sought to offer credit to customers who are unable to meet requirements from other sources. Andy Bryan commented: “We are still accepting a similar number of credit orders. The big difference is that now we’re accepting more orders from good customers and fewer from bad customers”.

FGH has 1.5 million customers and reported sales of more than £250 million in the last financial year.