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Utility Credit
Facts for Consumers from the Federal Trade Commission
Utility Credit -- November 1992
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 may want to get more detailed information about the ECOA and
other credit rights. For a free copy of the FTC's brochures:
Equal Credit Opportunity, Fair Credit Reporting, Credit and Older
Americans, and Women and Credit Histories, write to: Public
Reference, Federal Trade Commission, Washington, D.C. 20580.
You also may wish to contact the FTC about your complaint.
Although the FTC cannot represent you directly in a dispute with
a company, it can act when it sees a pattern of possible law
violation. Write to: Correspondence Branch, Federal Trade
Commission, Washington, D.C. 20580.
6/79; 4/83; 4/90
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