Can a public utility require a non refundable deposit for a new account?
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Can a public utility require a non refundable deposit for a new account?
I want to change my electrical service from my name to my daughters. They are
requiring a 150.00 deposit that will only be refunded when the service with the
PUD is terminated. Why isn’t that considered extortion? Since my daughter will
own the property and may never move or terminate the service, the money could
potentially never be refunded.
Asked on August 5, 2016 under Business Law, Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
It's not extortion because 1) your daughter is voluntarily choosing to open the account--no one is using illegal means (e.g. threats of violence or blackmail) to force her to do this, and what is done voluntarily is not extorted; and 2) she will get the money back if and when the service termintes--i.e. it is essentially being "banked" for her and she is not losing it (so long as she complies with the terms of service, pays her bills, etc., to that they do not need to draw on the deposit). Yes, it may be many, many years before she terminates the account, and it could even be the money will eventually go back to her estate if she passes away while living there, but on the other hand, she could choose to move and close the account in a year. The fact that the date of return is uncertain does not make holding the deposit illegal.
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