One of the listservs I subscribe to has had several questions posted regarding deceased customers and how other utilities handle the account of a person who has died.

Some utilities (generally smaller ones served by a single local newspaper) monitor the obituaries to see if any local deaths are utility customers. Why would that matter, you might ask?

Prevent identity theft

If you remember, one of the reasons for a Red Flags Rule policy is to prevent and mitigate identity theft.

In some cases, a utility bill in the customer’s name can be used as proof of ID. If a family member of a deceased customer were to move into the home and continue the service uninterrupted, that could be the first step in assuming a false identity. Insuring the account is transferred into the name of the executor or other living family member prevents any chance of that happening.

Protect against bad debt

Depending on the laws in your state, continuing to send a bill to a deceased person may prove to be difficult to collect if it goes unpaid. Therefore, transferring the account into the name of another living person is important.

Adequate security deposit

Additionally, if the deceased person was a longtime customer, they might have had a much smaller deposit (or even no deposit) than a customer applying for service today. Without an adequate security deposit, if the family member taking over the account proves to be habitually late paying, you could end up stuck with bad debt when they leave or sell the property.

Therefore, requiring the person who inherits or otherwise assumes responsibility for the property to apply for a new account is the safest policy.