I wasn’t initially going to write something about this report, but it was the last line of the press release that changed my mind. The National Consumer Law Center has published a report detailing a “crisis” in Massachusetts due to the amount of unpaid utility debt owed by individuals and households, and that “urgent action is needed to keep the heat on” this winter. I’ve written about the growing amount of unpaid utility debt in the past and some of the measures that are being taken to address it, but what made me decide to write about this particular report was the last recommendation made by the NCLC:
States should form working groups tasked with exploring the ways in which punitive credit and collection practices and communications strategies can be revised.
Whether you agree with their position or not, the NCLC has done a very effective job at the state level in recent years raising public awareness and getting laws passed with respect to medical debt, and could do the same for utility debt, so it’s important for companies in the accounts receivable management industry to have this issue on their radar.
In Massachusetts alone, nearly 500,000 utility customers are at least 90 days behind on their payments, which puts them at an increased risk of having their heat or electricity turned off. The amount owed by those at least 90 days behind has increased to nearly $700 million from $400 million at the start of the pandemic. Those numbers are serious.
States should be working to not only reduce the number of customers who have their utilities disconnected but also the stress felt by those individuals, the NCLC recommends, “while also improving overall rates of utility revenue collection.”
One of the other recommendations made in the report — something which collectors might want to be aware of as well — is making sure that customers are aware of programs, such as the Emergency Rental Assistance Program (ERAP) and the Homeowner Assistance Fund (HAF) which could help customers pay off their unpaid utility debts.