How does your utility handle accounts for customers who have passed away?
The best practice is to close the account in the name of the deceased customer and open a new account in the name of the executor or family member who moves into the home. Let’s examine some reasons why:
Prevent identity theft
One of the objectives of having a Red Flags Rule policy is to prevent and mitigate identity theft.
In some cases, a utility bill can qualify as a form of ID. If a family member of a deceased customer had intentions of stealing the identity of their dearly departed relative, having a utility bill in that person’s name is one step in the process. Requiring the account to be transferred into the name of the executor of the estate or other surviving family member eliminates any chance of identity theft.
Collect unpaid bills
Collecting on an unpaid bill in the name of a deceased person can be difficult. Ensuring that the account is transferred into the name of a living person guards against this. This is another reason why asking for the name of a relative who doesn’t live with the applicant is a good practice when establishing a new account.
Up-to-date security deposit
If the deceased customer was a longtime customer, they may have a significantly smaller security deposit (or none at all) than would be required of whoever continues living in the home. If the family member occupying the property turns out to be a delinquent customer, you could be stuck with bad debt when they move out.
Surviving spouse
If the deceased customer is survived by their spouse, many utilities will transfer the account into the spouse’s name without requiring an updated deposit. All that is typically required is for the surviving spouse to provide a copy of the death certificate.
How do you find out?
All of this begs the question of how do you find out when a customer has passed away? One easy solution is if a family member informs you of the death of a relative. However, that’s not always the case.
Back in the day, when every town had a local newspaper, many utilities would review the obituaries in every issue. Numerous small towns no longer have a local newspaper, so this option often doesn’t work. However, many funeral homes now post death notices and obituaries online, so some utilities monitor the websites of local funeral homes.
How does your utility find out about customers who have passed away? If you have a good solution, please send me an email and let me know.
Do you have a policy in place?
Does your utility have a policy in place for deceased customers? If not, or if you aren’t sure, please give me a call at 919-673-4050 or email me at gary@utilityinformationpipeline.com to learn how a business review can help you address this.
© 2024 Gary Sanders