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Author Topic: Can someone explain this to me?
Dagonee
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Eve and I just signed up for gas in our new place, and they required a deposit, which can be refunded after 12 months of on-time payments.

I've had an account with them before (9 years, not one missed or late payment). They offered to reduce the deposit by half, or take it away entirely if the gas is only in my name.

This makes no sense to me. The purpose of the deposit is to be able to collect if the person stops paying. The requirement is supposed to be dependent on the probability a person will default.

They consider me to have a low enough probability of default that I don't need a deposit if the account is in my name. How does adding Eve to the accoun increase the risk of default? In a collections situation with just me on the account, they could sue me. With Eve on the account, they can sue me, sue Eve, or sue us both. It increases their options.

So why are they requiring the deposit with both of us? It makes no sense!

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kmbboots
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Maybe they think she's a baaaad influence.
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TheGrimace
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it does seem to be a little silly given your solid history with them. However, it is somewhat reasonable, as any roomate situations are much more likely to result in late/missed payments because of miscommunication etc... If one person is responsible and the other is not then there's about a 50% chance that on any given month the irresponsible one will get the bill and forget/not pay it...
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Tante Shvester
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I can explain it. They do it because they can, and because the petty administrators will only "follow the policy" without any thought or consideration.

I can't believe that you don't understand this. I thought you were a bright guy.

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kmbboots
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I think they are just stupid. The didn't make me pay a deposit and they sooo should have!
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ElJay
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I can't explain it, but I can tell you how to get around it. Sign up under your name and then call in a month and add her as an authorized party on the account.
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TheHumanTarget
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They ran a background check on Eve and found out that she's been previously evicted...apparently even 6,000+ years isn't enough time to have that cleared off her credit report...
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ludosti
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[ROFL]
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El JT de Spang
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They're idiots. Parents are probably idiots, too. Comes from upbringing.
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Belle
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Alright, THT - I must admit, THAT was funny. [Smile]

Dag, they probably just have a policy that accounts with two people are a higher risk, because roommates fight, one moves out, they can't collect that person's portion of the bill, etc.

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TheHumanTarget
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quote:
Alright, THT - I must admit, THAT was funny.
Belle,
Have you been doggedly fighting the urge to find me humorous, or have I just been missing the mark lately? [Taunt]

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Farmgirl
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Has Eve checked her credit history lately to make sure there isn't bogus stuff on there? What with rampant identity theft and all....
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Orincoro
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quote:
Originally posted by Tante Shvester:
I can explain it. They do it because they can, and because the petty administrators will only "follow the policy" without any thought or consideration.

Yah, go ask the world to be reasonable and they will hand you a policy sheet where-on they define "reasonable," according an arbitrary set of census figures and a quotation from Shelly's "Frankenstein." The great thing about firm policies is that they work almost as well as some people's actual brains. Not yours though obviously, you will never understand the policy.
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MightyCow
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I imagine it's the same reason why switching the electricity to a new person's name costs $50. I'm sure it was a good 5 hours work for the person on the phone to change the names on the billing statement.
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Dagonee
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quote:
I can't explain it, but I can tell you how to get around it. Sign up under your name and then call in a month and add her as an authorized party on the account.
The problem is that we didn't know about the deposit when we signed up - they said they'd have to run the check and let us know, but that my history with them "likely" would make it unnecessary.

So we signed up, and now this is true:

quote:
I imagine it's the same reason why switching the electricity to a new person's name costs $50. I'm sure it was a good 5 hours work for the person on the phone to change the names on the billing statement.
We can get the deposit back in a year, so we'll probably just stick with it.

quote:
Dag, they probably just have a policy that accounts with two people are a higher risk, because roommates fight, one moves out, they can't collect that person's portion of the bill, etc.
Yeah, but they can go after either person for the entire bill, so they get two chances at collecting. *shrug*
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Bob_Scopatz
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I bet if you wrote to the CEO of the company, you could get your deposit back (...or waived). The policy on this sounds like it was written in two somewhat disconnected steps. They probably don't get a large number of new service orders with an old and a new customer, and they just have a default setting in their customer service prompt software for the folks that work that area. They obviously don't have a lot of latitude.

Since it's a utility company, they don't really have to worry too much about fixing the minor annoyances in their policies. Customers don't have a lot of choice on where to get the juice. So, they've probably evaluated it and decided this "problem" is too infrequent to bother making a NEW rule or over-ride in the system.

To me, it's worth dropping a note to the CEO just to let them know you found it annoying.

But, yeah, you can just wait a year and get your money back.

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ElJay
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Of course, if that note to the CEO is copied to the PUC, it probably wouldn't hurt anything. [Smile] Also, make sure you find out what interest rate you're getting on your deposit. At my company it varies by state, based on state regulations.
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David G
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quote:
Originally posted by Dagonee:
quote:
Dag, they probably just have a policy that accounts with two people are a higher risk, because roommates fight, one moves out, they can't collect that person's portion of the bill, etc.
Yeah, but they can go after either person for the entire bill, so they get two chances at collecting. *shrug*
That's true legally. But when evaluating the credit risk of joint debtors, a higher risk debtor will often drag down the credit worthiness of the other debtor with otherwise good credit. For example, when applying for a mortgage, an applicant with good credit will qualify alone, but then may not qualify if a joint applicant has poor credit. I don't know why this happens, but it is not unusual. I'm not sure whether there are statistics on this, or whether credit scoring is, at times, irrational.
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Occasional
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Here is the problem ElJay with writing to the PUC, although you always can if you would like. I have found the the PUC has already agreed with the Utilities exactly what can and cannot be done by policy. Unless the action is seriously grevious, the PUC would look at it and probably file it away to be forgotten. The only way for change is not the PUC, but new government regulatory rules.

"How does adding Eve to the account increase the risk of default? In a collections situation with just me on the account, they could sue me. With Eve on the account, they can sue me, sue Eve, or sue us both. It increases their options."

Here is where you are missing the boat in how utility companies usually work. It takes them ten or 100 times more money to sue than to just have a provision allowing for collection at the time of default. Any ucollected money goes to collection agencies that can effect your credit rating. Next time you sign up for utilities won't be as easy. Either your credit rating will slip to the point of needing a deposit or you will be required to pay unpaid bills and a new deposit.

As for the deposit itself, the idea isn't on collection - although that would be good for them. It is on having something set aside to pay at least something on the unpaid amounts. They go by the assumption that the bill won't be collected rather than that it will. The deposit can then be used to pay unpaid bills, even if a tiny bit. As for the exact rules you are describing, maybe it is a glitch and maybe it isn't. You would have to do some more research.

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Dagonee
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quote:
Of course, if that note to the CEO is copied to the PUC, it probably wouldn't hurt anything. [Smile] Also, make sure you find out what interest rate you're getting on your deposit. At my company it varies by state, based on state regulations.
The interest rate difference between what I could get in my savings account and what I'll get on the deposit are minimal enough that it's not worth the effort to call the CEO at this point. If I get extra curmudgeonly after my paper is done I'll probably write one just for the hell of it. [Smile]

David G, you're right about that. My wife had a slightly better credit score when we got them last time, but I assume the gas company doesn't bother getting the scores. One reason I want her on it is to help establish our joint credit and give her a chance to get local references.

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Occasional
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Oh, they get the scores. You just have to find out from where. There are several credit score companies, and my experience has been they are rather inconsistant.
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ElJay
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quote:
Originally posted by Occasional:
Here is the problem ElJay with writing to the PUC, although you always can if you would like. I have found the the PUC has already agreed with the Utilities exactly what can and cannot be done by policy. Unless the action is seriously grevious, the PUC would look at it and probably file it away to be forgotten. The only way for change is not the PUC, but new government regulatory rules.

Occasional, I work for a utility. And part of my job involves straightening things out that come to us through PUC complaints. Your state may differ, of course, but in the five state region I deal with, PUC complaints are not just filed away to be forgotten, they are sent to the utility to be responded to, and we, at least, take them very seriously.
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