If you’re a utilities provider in Washington State, it’s helpful to know what the laws are regarding how to collect on delinquent accounts. Consumer costs are continuing to rise, with people paying more for food, clothing, services, and more. What this means is that it may become more difficult for customers to cover their utility bills. Since things like water and sewer are considered basic needs, there is usually more leeway with delinquent accounts, and multiple notifications to the account holders.
One of the great distinctions between utilities providers and other companies is that the city generally has the authority to cut off access (to water, power, etc). This is a strong incentive for account holders to pay off their debt, and an effective one at that. There are limits, however - check back later for a discussion on what requirements there are for delinquency notification and termination of service. In the meantime, let’s discuss the ability of government agencies to retain a collection agency to collect on utilities debt. Utilities collections in Washington State are bound by the Revised Code of Washington, so we'll explore that piece of legislation.
Without further ado, here is the actual text from RCW 19.16.500 (Revised Code of Washington):
“(1)(a) Agencies, departments, taxing districts, political subdivisions of the state, counties, and cities may retain, by written contract, collection agencies licensed under this chapter for the purpose of collecting public debts owed by any person, including any restitution that is being collected on behalf of a crime victim.
(b) Any governmental entity as described in (a) of this subsection using a collection agency may add a reasonable fee, payable by the debtor, to the outstanding debt for the collection agency fee incurred or to be incurred. The amount to be paid for collection services shall be left to the agreement of the governmental entity and its collection agency or agencies, but a contingent fee of up to fifty percent of the first one hundred thousand dollars of the unpaid debt per account and up to thirty-five percent of the unpaid debt over one hundred thousand dollars per account is reasonable, and a minimum fee of the full amount of the debt up to one hundred dollars per account is reasonable. Any fee agreement entered into by a governmental entity is presumptively reasonable.
(2) No debt may be assigned to a collection agency unless (a) there has been an attempt to advise the debtor (i) of the existence of the debt and (ii) that the debt may be assigned to a collection agency for collection if the debt is not paid, and (b) at least thirty days have elapsed from the time notice was attempted.
(3) Collection agencies assigned debts under this section shall have only those remedies and powers which would be available to them as assignees of private creditors.
(4) For purposes of this section, the term debt shall include fines and other debts, including the fee allowed under subsection (1)(b) of this section.”
While you may or may not need the assistance of a collection agency, it’s good to know what your options are - especially in recovering funds after charge-off. Look for an agency with experience in utilities collections, and download the free ebook below about how to choose the right collection agency.
