Billfloat: Payday Loans by Another Name

Payday lending is legalized loan-sharking. Actually, the Mob gives better interest rates. But sometimes people just need credit, and damn the interest rates.

Compared to a payday loan, Billfloat is a steal. Instead of paying, say, 360% interest, Billfloat may be only 150% (see Billfloat’s chart, at right).

For all the flack the credit card industry (rightly) gets, the highest interest rate you are likely to see from more credit cards is 30%. That’s a bargain compared to the payday lending industry. If you have to float a bill, use a credit card, not Billfloat.

(Thanks, Dan!)

Consumer Complaints Up, But Resources Are Down

The latest survey of front-line consumer agencies shows that while complaints went up, the resources to help consumers went down. 62% of the agencies reported that they received more complaints in 2008 than in 2007, and 47% of the agencies suffered budget cuts just prior to or during the survey period, with one being eliminated entirely.

Top consumer complaints for 2008, with 2008 ranking in 2007 in parenthesis:

  1. Auto: (1) Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes
  2. Home Improvement/Construction: (2) Shoddy work, failure to start or complete the job
  3. Credit/Debt Collection: (3) Billing and fee disputes, mortgage-related fraud, credit repair, debt settlement, predatory lending, illegal or abusive collection tactics
  4. Utilities: (5) Service problems, billing disputes with phone, cable, satellite, Internet, electric and gas services
  5. Retail Sales: (4) False advertising, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, nondelivery
  6. Services: (9) Misrepresentations, shoddy work, failure to have required licenses, failure to perform
  7. Household Goods: (6) Major appliances and furniture, problems with nondelivery, misrepresentations, faulty repairs
  8. Landlord/Tenant: (10) Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics
  9. (tie) Internet Sales: (7) Misrepresentations, nondelivery in online purchases; Home Solicitations: (8) Misrepresentations, nondelivery in door-to-door, telemarketing and mail solicitations, do-not-call violations
  10. Health Products and Services: (not in top 10 in 2007) misleading claims, failure to deliver

2008 Consumer Complaint Survey Report | Consumer Federation of America (CFA), National Association of Consumer Agency Administrators (NACAA), and North American Consumer Protection Investigators (NACPI)

U.S. consumer spending visualized

Avoid utility charges that are not yours

Never assume the next tenant will put utilities in their own name. Or if you move out and leave behind a roommate or sublease to someone, never assume they will do it, either.

When you move, make sure you call your utility providers to let them know you are moving and that they should remove your name from the account. You might want to follow up with a letter, as well, in case a dispute arises. If they need another name, give them the landlord’s.

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Center Point Energy shuts off heat in zero-degree weather

Tenants in an 11-unit apartment building in Minneapolis lost heat last Thursday. Happy Holidays from Center Point Energy! Of course, Center Point only shut off the heat because the landlord (Donald Christopher according to Hennepin County Property Records) had more than $10,000 in outstanding bills.

The Cold Weather Rule in Minnesota can prevent utility shut-offs during the winter months, but the bill-payer must contact the utility to ask for protection and arrange a payment plan. The Minnesota Public Utilities Commission has an excellent FAQ and a brochure (PDF) on the Cold Weather Rule.

In a case like this, where the landlord was supposed to be paying the bill, tenants can band together to take over the utility bill and deduct utility payments from their rent. In this case, that would be a hefty bill, but a group of tenants can take advantage of the Cold Weather Rule to arrange a payment plan and keep the heat on.

The Cold Weather Rule doesn’t really work | City Pages Blotter

(photo: Wikimedia Commons)

3,400 occupied homes in Minnesota have no heat this winter

CenterPoint energy estimates that about 5,200 homes are disconnected, and about 3,400 of those are occupied. That means that during the past three extremely cold weeks, 3,400 households have had no heat, or only what heat they can generate from space heaters (until Xcel shuts off their electricity, I would assume). CenterPoint says most were shut off during the summer and took no steps to restore service before winter arrived.

Congress is stalled on bills that include federal energy aid, and so local relief agencies worry that energy relief money could run out soon, possibly before Christmas.

According to the StarTribune, “CenterPoint and Xcel say they’ve been contacting delinquent customers through phone calls, letters, and home visits to work out payment plans and restore heat.” But at the same time, CenterPoint intends to start reporting delinquent accounts. No heat and a bad credit rating?

If you are a consumer facing a shutoff this winter, you can prevent the shutoff through April 15 by applying for protection under Minnesota’s Cold Weather Rule and arranging payments with your utility company. This is based on need, and you must request Cold Weather Rule protection.

[photo: Chance Agrella]

Tip for Minnesotans: Single-Metered Residential Buildings (Shared Utility Meters)

When an apartment shares a utility meter with another apartment or a common area, it can cause a lot of problems. For example, the tenant in Apartment 1 may get the bill, but what if the tenant in Apartment 2 uses more gas or electricity? Shouldn’t the paying tenant have some recourse? Or what if the tenant in Apartment 2 is supposed to split the bill, but doesn’t pay up. Should it be the paying tenant’s responsibility to collect, or should the landlord bear some responsibility?

In Minnesota, the legislature decided that the best solution to the problem was to make the landlord responsible. Therefore, if you (1) live in Minnesota (2) in a multi-unit apartment building, and (3) the utility meter that serves your apartment also serves another apartment or a common area (such as the basement washer and dryer), then your landlord–not you–must be responsible for the bill, and must be the customer of record with the utility company.

This means that you should not be receiving a bill direct from the utility company. This does not mean that your landlord cannot bill you for utilities. In order to do so, your landlord has to comply with several requirements. First and foremost, any method of apportionment must be in writing and in your lease. It must also be equitable–i.e., it must bear some relation to the utilities you actually consume. There are also notice requirements. You are entitled to see the actual utility bills, even before you move in–so that you know what you are getting into.

If you think you are paying on a shared meter, notify your utility company immediately. They will come out and examine the situation, then switch the bill to your landlord. That should take care of your immediate situation. However, you are also entitled to recover the amounts paid for utilities that you were not legally obligated to pay. You should approach your landlord about this first. If the landlord refuses to reimburse you, you can sue. In court, you can recover up to three times the amounts you paid or $500, whichever is greater, plus your attorney fees. Faced with that, your landlord should agree to reimburse you, and will be wiser in future.