Housing providers to be fined for improper fee charging

Not only the population should pay penalties in case of the payments being overdue for housing and public utilities. The sanctions should be applied to housing providers which charge wrong payments for the services. Such recommendation was included by the Public Chamber in a review submitted to the State Duma concerning bill “On Amendments to Certain Legislative Acts of the Russian Federation in connection with the strengthening of the payment discipline of energy consumers”.

According to the bill, prepared by the Ministry of Energy, the penalties for late payment of bills for electricity and heat supply should be increased twice and amount to 1/170 of the refinancing rate for each day of delay. This corresponds to 17.7 per cent per annum.

This is significantly tightening for the consumers. After all, today the penalty for each day of delay is 1/360 of the refinancing rate for all kinds of utilities that is about 9 percent per annum. According to officials, as it is much lower than the rate of credit for consumers (15 percent), many wealthy residents prefer to delay payments to actually get a loan on favorable terms.

As reported by Aleksandr Kozlov, expert of the Public Chamber of Local Government and Housing, now tenants often receive incorrect bills far exceeding the actual volumes of the used housing and public utilities.

 “The responsibility of the housing and public utilities providers is almost never spelled out. There is article “Consumer fraud”, but in this case it is difficult to be applied because it is difficult to prove that the wrong bills were written deliberately and not absent-mindedly”, said the expert.

The review the bill will be submitted to the State Duma Committee on Housing Policy. Deputy Chairman Pavel Kachkayev believes that most likely the amendments will be taken into account during the consideration of the bill.

“I agree that providers and consumers need to be in an equal position and bear equal responsibility”, - said the deputy. According to him, the penalties for unscrupulous providers must also be 1/170 of the refinancing rate.

The deputy also supports the other offers of the Public Chamber including, in particular, a single size of the penalties for all housing services, the provision of sales discounts for management companies (they will receive the services at wholesale prices and then sell them at retail prices to tenants, leaving the difference as profit). Discounts can be provided also for d conscientious tenants who will pay for housing and public utilities in advance.

However, as explained by Pavel Kachkayev, not all management companies will get discounts, but only those which do not have any debts to the providers. Due to this promotion, it is planned to improve the discipline when paying the bills. According to Aleksandr Kozlov, the discount rate for housing and public utilities is unlikely to exceed even 2 percent.

“The housing and public utilities providers oppose the discounts as they mean the decrease in their profits decline”, said Aleksandr Kozlov.

Aleksander Budarin, Advisor to Director General of the Fund Assisting the Restructuring of Housing and Public Utilities, doubts the expediency of increasing the penalties and toughening the responsibility of the consumers.

 “If you increase the penalties for the providers, they will provoke delayed payments. For example, they will send delayed invoices.  As for the responsibility of the providers, there are all the tools to bear it. If there was a simple mistake, the money is returned to the tenants. If we are talking about conscious consumer fraud, then it is subject to criminal proceedings. You cannot impose penalties on the companies for casual clerical errors”, he said.