Utility Credit: Fast Facts
By |
| facts | for Consumers |
Federal Trade Commission - November 1992
Utility Credit
fast facts
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| Bureau of Consumer Protection Office of Consumer & Business Education (202) 326-3650 |
"My husband and I always paid our phone, gas, and electric bills promptly. Then...suddenly...he was gone. When I tried to
get utility service in my own name, each company wanted me to make deposits ranging from $25 to $100. Can they do this?'
Women sometimes write the Federal Trade Commission with this type of question.
Getting Utility Credit
A utility account is generally a credit account. You get service now and pay for it later. Like any other creditor, a utility
company keeps a record of your payment patterns. This record is your utility credit history.
Utility credit discrimination is illegal under the Equal Credit Opportunity Act (ECOA). The ECOA forbids discrimination based
on your sex, marital status, race, national origin, religion, age, or because you receive public assistance income. The ECOA
also contains specific rules that utility companies and other creditors must follow when evaluating their customers' credit
histories.
Utility companies frequently require customers to make a deposit or to get a letter of guarantee from someone who will agree
to pay the bill if the customer does not. Under the law, requiring a deposit or letter of guarantee can be the same thing
as denying credit or offering credit on less favorable terms.
Paying a Deposit
The utility company generally can require a deposit if you have a bad utility credit history, if you are a new customer and
all new customers are required to pay deposits, or for other non-discriminatory reasons. For example, the utility company
might ask you to pay a deposit if there is no record of your name on your husband's account. But if you had previous service
in your husband's name, the company must consider that credit history as yours. If you shared a credit history, it might be
unlawful to require you to pay a deposit if your husband got credit without paying a deposit.
Challenging a Bad Credit History
But there is another side of the coin. If your husband's credit history on a shared account was bad, the company will consider
that credit history yours as well and might ask you to pay a deposit or get a letter of guarantee. The ECOA gives you the
opportunity to prove that your husband's bad credit history did not reflect your unwillingness or inability to pay. For example,
if you can prove that you did not live with your husband when the account was overdue, the company must take that into consideration.
If you never saw the bills, or paid them as soon as you discovered they were overdue -- that also must be considered.
Usually your spouse's utility credit history can only be considered if your spouse lived with you or benefited from using
your account. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico,
Texas, and Washington), the utility company can consider information about your spouse even if you were not living together
and did not share the account.
If you cannot convince the company, you may have to pay a deposit or get a letter of guarantee. Or, you may be asked to pay
your husband's old debts before your service is connected. In the latter case, the company's right to take such action is
governed by state law, not the ECOA. If this happens, contact your local consumer office for more information.
Getting the Reason in Writing
Whenever you are denied credit or offered less than favorable credit terms that you do not want to accept -- including utility
credit -- you have the right to know the specific reason. If this happens, request the reason in writing.
Getting More Information
| You can file a complaint with the FTC by contacting the Consumer Response Center by phone: 202-FTC-HELP (382-4357); TDD: 202-326-2502;
by mail: Consumer Response Center, Federal Trade Commission, Washington, DC 20580; or through the Internet, using the online complaint form. Although the Commission cannot resolve individual problems for consumers, it can act against a company if it sees a pattern
of possible law violations.
The FTC publishes free brochures on many consumer issues. For a complete list of publications, write for Best Sellers, Consumer Response Center, Federal Trade Commission, Washington, D.C. 20580; or call (202) FTC-HELP (382-4357), TDD (202) 326-2502. |
© 1992 Federal Trade Commission