U.S. heating oil dealers clamp down on unpaid bills
NEW YORK (Reuters) - U.S. heating oil dealers are using new software to weed out clients who may not pay their bills as Americans gear up for another winter of high fuel costs in the world's top consumer.
Heating oil dealers in New York City, Long Island, and Connecticut have turned to data-sharing software to track delinquent clients -- a more common problem with the rise in prices.
"In many cases, delinquent oil bills don't get posted to the large credit-reporting agencies," said John Maniscalco, executive vice president of the New York Oil Heating Association. "Given the current situation of the industry where bills are large and consumers are getting shut off, they tend to jump from one company to another."
U.S. heating oil futures have shot up more than 60 percent from the same time last year, from $1.98 per gallon to $3.21.
The data-sharing software, called "OilWell," allows dealers to share information with each other about clients who do not pay their bills on time.
"We're not a credit reporting agency -- we don't tell you to take them on or not to take them on. It's up to you to assess the risk," said Larry Smith, the founder and chief executive of Risk Assessment LLC, the company that designed the software.
John Knief, owner of East Coast Petroleum, looked up a potential customer in OilWell last week and found that he owed about $1,200 to two other companies, and then turned him down.
OilWell comes just as oil dealers -- particularly small "mom and pop" operations -- are confronting hard times, as banks are more parsimonious with credit.
"Back in the day, we were never pressed for money like we are now," said Maniscalco, noting that some dealers have had to close shop because of customers who cannot pay up.
At the same time, banks have tightened credit just as higher oil prices send dealers to the bank for larger loans.
"You have a credit crunch on one end. On the other end, you have high oil prices," said Paul Conley, chief financial officer of Castle Oil.
(Reporting by Rebekah Kebede, editing by Matthew Lewis)
