Unpaid Utility Claims and the Fair Credit Reporting Act

By Jeffrey K. Bearss

The Federal Trade Commission (FTC) regulates credit reporting and administers the rules that govern credit reporting agencies Experian, Equifax, and TransUnion. Ultimately, the FTC enforces laws that protect consumers, such as the Fair Credit Reporting Act (FCRA). This legislation aims to guarantee the accuracy, fairness, and privacy of files collected by the agencies mentioned above.

The act requires that these agencies provide individuals with copies of their credit report, allowing them to question any potential inaccuracies. Should any consumer raise a concern, the agency involved has a responsibility to follow through with an investigation, correcting any erroneous data. The three credit agencies compile reports based on the information they receive from various creditors, releasing the data to businesses and other creditors when they demonstrate a need for it. Today, credit scores play a primary role in business decisions, as creditors must exercise great care to avoid potential problems.

Many do not think of utility companies as creditors, but they extend service credit to their customers, allowing them to benefit from the utility now and pay for it later. To that extent, utility companies may report to the three agencies. Because sending credit information is not free, different companies adopt different policies. Some send reports only for those customers who pay late or not at all, whereas others file for both positive and negative accounts.

Utility companies may use reporting to encourage timely payments. When customers know that the utility company will file a report, they have more incentive to pay on time. On the other hand, reporting to credit agencies may cause the utility company money if the number of consumer complaints rises. Such an increase would necessitate more employees and different training.

In addition, an angry consumer may raise legal action through the FCRA, especially if he or she feels the utility company has bullied timely payments by threatening reports to credit agencies. Utility companies already have the option of assessing fees for late payments, making unpaid claims a double burden on the consumer. Instead of pursuing such policies, utility companies may want to consider instituting payment plans, which encourages the consumer to work with the utility provider rather than opt for legal action against it.

About the Author:

A resident of Michigan, Jeffrey K. Bearss is an attorney with Weltman, Weinberg & Reis Co., LPA, where he has practiced collection, probate, and family law, among other specialties. Working with a variety of creditors and lenders, he offers expert counsel and representation with a team of other attorneys. Regarded as an expert in his field, Jeffrey K. Bearss has presented on issues related to collection law before several organizations, including the National Business Institute.

WWR’s 80-Year History Law and Commercial Collections Expertise

By Jeffrey Bearss

As an attorney with the Troy, Michigan, office of Weltman, Weinberg & Reis Co., LPA (WWR), I work in one of the leading collection law firms in the United States. Operating in 7 states with 1,200 total lawyers and staff, WWR’s history stretches back eight decades.  The firm was launched in 1930 in Cleveland as Gardner and Spilka, with a unique focus on helping Depression-era local banks and retail enterprises collect on outstanding debt obligations. Changing its name to Gardner, Spilka and Weltman in the 1950s; then Weltman, Weinberg and Associates Co., LPA, in 1979, the firm continued to focus on protecting creditors’ rights and interests.

Notably, Robert Weltman and Alan Weinberg were responsible for establishing and integrating the collections and legal sides of the firm. This positioned the firm as one with unique dual functionalities, equipped to meet the diverse needs of its corporate and financial institution clients. WWR took its current name, Weltman, Weinberg & Reis Co., LPA, in 1994, recognizing the contribution of Allen Reis in expanding the Columbus, Ohio, practice.

WWR currently operates 10 offices spanning 8 states, in cities such as Ft. Lauderdale, Philadelphia, Chicago, Cincinnati, and Pittsburgh. This record of consistent expansion has led to the firm’s recognition by Collections and Credit Risk magazine as the nation’s largest creditors’ rights law firm. With 125 specialized attorneys and a support staff of over 1,100, the WWR National Litigation Networks undertake cases outside the firm’s established focus area with the assistance of experienced local counsel. Weltman, Weinberg & Reis Co., LPA, represents over 600 credit unions nationwide, and collects $3 billion in annual net revenue for clients. The Troy, Michigan, office at which I practice has more than 80 total employees, including 11 attorneys.

With a territory spanning the State of Michigan, we handle cases in every county of the State. Our team of attorneys files some 2,300 suits per month, representing clients such as Capital One Bank, Ford Motor Credit Company, Chrysler Financial, Discover Bank, PNC Bank, Sears, JP Morgan Chase Bank, Nationwide Insurance, Progressive Insurance, Allstate Insurance, and the St. Joseph Mercy Health System. With 23 years of experience as an attorney, Jeffrey Bearss has practiced in the Consumer Collections, Subrogation, and Credit Union Groups of Weltman, Weinberg & Reis Co., LPA, since 2007.

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