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Utility Credit
"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.
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