Texas Administrative Code
Title 16 - ECONOMIC REGULATION
Part 2 - PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 26 - SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS
Subchapter B - CUSTOMER SERVICE AND PROTECTION
Section 26.24 - Credit Requirements and Deposits
Universal Citation: 16 TX Admin Code § 26.24
Current through Reg. 50, No. 13; March 28, 2025
(a) Dominant certificated telecommunications utility (DCTU).
(1) Credit requirements for permanent
residential applicants.
(A) A DCTU may
require a residential applicant for local telecommunications service to
establish and maintain satisfactory credit as a condition of providing service.
(i) Establishment of credit or payment of a
deposit shall not relieve any customer from complying with the DCTU's
requirements for prompt payment of bills.
(ii) The creditworthiness of spouses
established during the last 12 months of shared service prior to their divorce
will be equally applied to both spouses for 12 months immediately after their
divorce.
(B) A
residential applicant can demonstrate satisfactory credit using one of the
criteria listed in clauses (i) - (iv) of this subparagraph.
(i) Payment record. The residential
applicant:
(I) has been a customer of any
DCTU for residential local telecommunications service within the last two
years;
(II) is not delinquent in
payment of any residential DCTU service;
(III) during the last 12 consecutive months
of service was not late in paying a bill more than once and did not have
service disconnected for nonpayment; and
(IV) upon request, shall receive a letter of
credit history from the applicant's previous DCTU. DCTUs are required to keep
payment history for two years after termination of service to a
customer.
(ii) Other
means. The residential applicant demonstrates a satisfactory credit rating by
appropriate means, including, but not limited to, the production of:
(I) generally accepted credit
history;
(II) letters of credit
reference;
(III) the names of
credit references which may be quickly and inexpensively contacted by the
utility; or
(IV) ownership of
substantial equity that is easily liquidated.
(iii) Senior applicant. The residential
applicant is 65 years of age or older and does not have an outstanding
residential service account balance incurred within the last two years with a
DCTU.
(iv) Victim of family
violence: The residential applicant has been determined to be a victim of
family violence as defined in Texas Family Code §
71.004, by a family
violence center as defined in Texas Human Resources Code §
51.002, by
treating medical personnel, by law enforcement personnel, by the Office of a
Texas District Attorney or County Attorney, by the Office of the Attorney
General, or by a grantee of the Texas Equal Access to Justice Foundation. This
determination shall be evidenced by submission of a certification letter
developed by the Texas Council on Family Violence.
(C) The DCTU may require the applicant to pay
a deposit only if the applicant does not demonstrate satisfactory credit using
the criteria in subparagraph (B) of this paragraph.
(2) Credit requirements for non-residential
applicants. The DCTU may require a non-residential applicant to pay a deposit
if the applicant's credit for service has not been demonstrated satisfactorily
to the DCTU.
(3) Credit
requirements for temporary or seasonal service and for weekend residences. The
DCTU may establish credit policy and deposit requirements to reasonably protect
it against the assumed risk for temporary or seasonal service or service to a
weekend residence, as long as the policy and requirements are applied in a
uniform and nondiscriminatory manner. The DCTU shall return deposits according
to guidelines set out in paragraph (11) of this subsection.
(4) Initial deposits.
(A) A residential applicant or customer who
is required to pay an initial deposit may provide the DCTU with a written
letter of guarantee instead of paying a cash deposit.
(B) A DCTU shall not require an initial
deposit from an existing customer unless the customer was late paying a bill
more than once during the last 12 months of service or had service disconnected
for nonpayment. The customer may be required to pay this initial deposit within
ten days after issuance of a written disconnection notice that requests such
deposit. Instead of an initial deposit, the customer may pay the total amount
due on the current bill by the due date of the bill, provided the customer has
not exercised this option in the previous 12 months.
(5) Additional deposits.
(A) During the first 12 months of service,
the DCTU may request an additional deposit if the customer's actual usage:
(i) is at least three times estimated usage
(or three times average usage of the three most recent bills);
(ii) exceeds $150; and
(iii) exceeds 150% of the security
held.
(B) A DCTU may
also require an additional deposit if:
(i)
actual billings of a residential customer are at least twice the amount of the
estimated billings after two billing periods;
(ii) actual billings of a non-residential
customer are at least twice the amount of the estimated billings; and
(iii) a suspension or disconnection notice
was issued for the account within the previous 12 months.
(C) A DCTU may require an additional deposit
be paid within ten days after issuing written notice of suspension or
disconnection and requesting an additional deposit.
(D) Instead of an additional deposit, a
residential customer may elect to pay the total amount due on the current bill
by the due date of the bill, provided the customer has not exercised this
option in the previous 12 months.
(E) The DCTU may disconnect service if the
additional deposit or the current usage payment is not paid within ten days of
request provided a written suspension or disconnection notice has been issued
to the customer. A suspension or disconnection notice may be issued
concurrently with the written request for the additional deposit or current
usage payment.
(6)
Amount of deposit. When a DCTU requires a deposit:
(A) The total of all deposits, initial and
additional, shall not exceed an amount equivalent to one-sixth of the estimated
annual billing, except as provided in §
26.29 of this title (relating to
Prepaid Local Telephone Service).
(B) The estimated annual billings shall not
include charges that are not in a DCTU's tariff.
(C) For residential applicants and customers:
(i) estimated annual billings:
(I) shall not include long distance charges
from other service providers;
(II)
may include charges for tariffed local telecommunications services;
(III) may include charges for intraLATA toll
only if the DCTU or its affiliate is providing this service to the customer;
and
(IV) may include charges for
interLATA toll only if the DCTU or its affiliate is providing this service to
the customer.
(ii) the
deposit amount related to local telecommunications service and long distance
service shall be separately identified.
(iii) the deposit amount related only to
basic local telecommunications service may be required as a condition for
providing basic local telecommunications services.
(D) For non-residential applicants and
customers, estimated annual billings may include long distance charges only
when the DCTU bills those charges.
(7) Interest on deposits.
(A) Each DCTU requiring deposits shall pay
interest, compounded annually, on these deposits. The annual rate shall be at
least equal to that set by the commission on or before December 1 of the
preceding calendar year, pursuant to Texas Utilities Code Annotated §
183.003 (relating to Rate of Interest).
(i)
If a deposit is refunded within 30 days of receipt, no interest payment is
required.
(ii) If the utility keeps
the deposit more than 30 days, payment of interest shall be made retroactive to
the date of deposit.
(B)
Payment of the interest to the customer shall be made annually, if requested by
the customer, or at the time the deposit is returned or credited to the
customer's account.
(C) The deposit
shall draw interest until the date it is returned or credited to the customer's
account.
(8)
Notification to applicants and customers. When a deposit is required, the DCTU
shall explain to applicants or customers the terms and conditions related to
deposits and refunds.
(9) Records
of deposits. The DCTU shall:
(A) Keep records
to show:
(i) the name and address of each
depositor;
(ii) the amount and date
of the deposit; and
(iii) each
transaction concerning the deposit;
(B) Issue a receipt of deposit to each
applicant or customer paying a deposit and provide means for a depositor to
establish claim if the receipt is lost;
(C) Keep deposit records for one year after a
deposit is refunded;
(D) Maintain
each unclaimed deposit for at least four years;
(E) Make a reasonable effort to return an
unclaimed deposit;
(F) Upon the
sale or transfer of any DCTU or any of its operating units, provide the buyer
with all deposit records.
(10) Guarantees of residential customer
accounts.
(A) A guarantee between a DCTU and
a guarantor must be in writing and shall be for no more than the amount of
deposit the DCTU would require on the customer's account pursuant to paragraph
(6) of this subsection. The amount of the guarantee shall be clearly indicated
in the signed agreement.
(B) The
guarantee shall be voided and returned to the guarantor according to the
provisions of paragraph (11) of this subsection.
(C) Upon default by a residential customer,
the guarantor of that customer's account shall be responsible for the unpaid
balance of the account only up to the amount in the written
agreement.
(D) The DCTU shall
provide written notification to the guarantor of the customer's default, the
amount owed by the guarantor, and the due date for the amount owed.
(i) The DCTU shall allow the guarantor 16
days from the date of notification to pay the amount owed on the defaulted
account. If the sixteenth day falls on a holiday or weekend, the due date shall
be the next work day.
(ii) The DCTU
may transfer the amount owed on the defaulted account to the guarantor's own
service bill provided the guaranteed amount owed is identified separately on
the bill.
(E) The DCTU
may disconnect service to the guarantor for nonpayment of the guaranteed amount
only if the disconnection was included in the terms of the written agreement
and only after proper notice as described by subparagraph (D) of this
paragraph, and §
26.28 of this title (relating to
Suspension or Disconnection of Service).
(11) Refunding deposits and voiding letters
of guarantee.
(A) If service is not
connected, or is disconnected, the DCTU shall:
(i) promptly void and return to the guarantor
all letters of guarantee on the account; or
(ii) provide written documentation that the
contract has been voided; or
(iii)
refund the applicant's or customer's deposit plus accrued interest on the
balance in excess of the unpaid bills for service furnished.
(B) If residential service is
disconnected, the DCTU shall ensure that the deposit amount for local
telecommunications service is applied first to local telecommunications service
charges.
(C) A transfer of service
from one premise to another within the service area of the DCTU is not a
disconnection.
(D) The DCTU shall
promptly refund the deposit plus accrued interest to the customer, or void and
return the guarantee, or provide written documentation that the contract has
been voided, when the customer:
(i) paid
bills for 12 consecutive residential billings or for 24 consecutive
non-residential billings without having service disconnected for
nonpayment;
(ii) was not late in
paying a bill more than twice in the last 12 consecutive billings (24 for
non-residential); and
(iii) is not
delinquent in the payment of the current bill.
(E) If the customer does not meet the refund
criteria in subparagraph (D) of this paragraph, the DCTU may retain the deposit
and interest or the letter of guarantee.
(12) Re-establishment of credit.
(A) Before service is reconnected, the DCTU
may require an applicant whose service was previously disconnected for
nonpayment or theft of service, to reestablish credit and to pay:
(i) all amounts due the DCTU; or
(ii) execute a deferred payment agreement, if
offered.
(B) The DCTU
must prove that the amount due for services furnished and any other charges
required as a condition of local service restoration are correct.
(C) The DCTU may require a residential
applicant to pay or execute a deferred payment agreement only for the total
amount due for tariffed local telecommunications service in order to receive
basic local telecommunications service.
(13) Customer credit and deposit information.
A DCTU shall safeguard customer credit and deposit information in accordance
with § 26.122 of this title (relating to Customer Propriety Network
Information).
(b) Non-dominant certificated telecommunications utility (NCTU).
(1) Credit requirements for permanent
residential applicants. An NCTU may require a residential applicant for local
telecommunications service to establish and maintain satisfactory credit as a
condition of providing service.
(A)
Establishment of credit or payment of a deposit shall not relieve any customer
from complying with the NCTU's requirements for prompt payment of
bills.
(B) The creditworthiness of
spouses established during the last 12 months of shared service prior to their
divorce will be equally applied to both spouses for 12 months immediately after
their divorce.
(2)
Amount of deposit. When an NCTU requires a deposit:
(A) The total of all deposits, initial and
additional, shall not exceed an amount equivalent to one-sixth of the estimated
annual billing.
(B) For residential
applicants and customers:
(i) estimated
annual billings shall not include long distance charges from other
non-affiliated service providers;
(ii) the deposit amount related to local
telecommunications service and long distance service shall be separately
identified; and
(iii) the deposit
amount related only to basic local telecommunications service may be required
as a condition for providing basic local telecommunications services.
(3) Interest on
deposits.
(A) Each NCTU requiring deposits
shall pay interest, compounded annually, on these deposits. The annual rate
shall be at least equal to that set by the commission on or before December 1
of the preceding calendar year, pursuant to Texas Utilities Code Annotated
§ 183.003 (relating to Rate of Interest).
(i) If a deposit is refunded within 30 days
of receipt, no interest payment is required.
(ii) If the utility keeps the deposit more
than 30 days, payment of interest shall be made retroactive to the date of
deposit.
(B) Payment of
interest shall be made at the time a deposit is returned or credited to the
customer's account.
(C) The deposit
shall draw interest until the day it is returned or credited to the customer's
account.
(4)
Notification to applicants and customers. When a deposit is required, the NCTU
shall explain to applicants or customers the terms and conditions related to
deposits and refunds.
(5) Records
of deposits. The NCTU shall:
(A) Keep records
to show:
(i) the name and address of each
depositor;
(ii) the amount and date
of the deposit; and
(iii) each
transaction concerning the deposit;
(B) Issue a receipt of deposit to each
applicant or customer paying a deposit and provide means for a depositor to
establish claim if the receipt is lost;
(C) Keep deposit records for one year after a
deposit is refunded;
(D) Maintain
each unclaimed deposit for at least four years;
(E) Make a reasonable effort to return an
unclaimed deposit; and
(F) Upon the
sale or transfer of any NCTU or any of its operating units, provide the buyer
with all deposit records.
(6) Refunding deposits.
(A) If service is not connected, or is
disconnected, the NCTU shall promptly refund the customer's deposit plus
accrued interest on the balance in excess of the unpaid bills for service
furnished.
(B) If residential
service is disconnected, the NCTU shall ensure that the deposit amount for
local telecommunications service is applied first to local telecommunications
service charges.
(C) An NCTU shall
refund the deposit and interest when the customer meets the NCTU's refund
criteria.
(7) Customer
credit and deposit information. An NCTU shall safeguard customer credit and
deposit information in accordance with § 26.122 of this title.
(c) NCTU implementation. NCTUs shall implement this section no later than March 1, 2001.
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