Routine Invoice or Unproven Claim? What to Do with Questionable Utility Invoices
As property owners, the MIABC’s members are accustomed to receiving utility invoices on a regular basis. Members should be aware, however, that these “invoices” are not always what they seem.
David Tupper, the MIABC’s Claims & Risk Analyst, explains that when a utility has suffered a loss due to what they perceive to be the negligence of a local government, many send the file to their debt collection department. The member’s first notice of the claim then comes in the form of an invoice as opposed to a demand letter. The invoice provides no explanation as to why the member is thought to be at fault, but contains the usual warnings about the repercussions of not paying in time. When a member does not respond to the invoice within 30 days, debt collectors have been known to make threats.
In one case, a phone company threatened to terminate the member’s phone services due to non-payment of a claim. The “invoice” even made reference to the member’s account number, though the claim had nothing to do with the account. In another case, a subrogating property insurer threatened to damage the member’s credit rating if a “debt” – which was in reality an alleged claim – was not paid.
These tactics are inappropriate when the invoices represent not a debt but rather an unproven liability claim. The threats about defaulting on the “debt” are entirely empty.
To avoid paying a claim without proper investigation, David advises the MIABC’s members to scrutinize utility invoices. In particular, look for language such as: “Our investigation has determined that you are responsible for…”. If there is any doubt about whether an invoice represents a debt or a claim, members should send the matter to the MIABC. Doing so will not affect the member’s claims rating unless it materializes into a claim that exceeds the member’s deductible.
If the invoice represents a small amount and the member wishes to handle it themselves, the member should clarify with the sender that the invoice represents an alleged claim, not a debt, and request particulars of the alleged claim.
Go back to previous page.