Anyone know if it's legal or allowed for heating oil dealers to charge interest on fuel assistance?

[Jim Warren]

I have an elderly neighbor, lives next door here in central New England, and we help each other out, I'll shovel her walk and she'll bake up a batch of something good, etc.
Yesterday she was telling me the dealer where she gets her heating oil hits her with interest charges when the LIHEAP payment program lag time runs over 30 days (or 60 days as the case may be) This has happened sometimes twice a year, she showed me the bills, and effectively reduces her benefit level with the interest charge coming out of the total funds.

She has not made sense of it after inquiring and I tried calling the agency (Community Action) but I'm not a recipient and didn't get very far. They are swamped this time of year so you go through the phone menu and it's hard to get a live person to talk to.

Anyone know if this is SOP, allowed or even legal?

[MrYikes]

1. are you talking about $3.68 worth of interest?

[Jim Warren]

2. No

In the past it has amounted to sometimes up to $50 for the heating season. That aside, my question was framed to ask IF it's even allowed and/or legal for a dealer to do this so the amount doesn't matter.

[elleng]

3. May be 'legal,' and LIHEAP should reimburse for this,

but could be difficult to 'enforce,' due to bureaucracy.

This is my immediate impression, and as have no experience with the program, not an educated opinion.

[Jumping John]

4. Most states make it unlawful to charge interest or late fees on the unpaid portion of a utility bill

If I were you, I would get in touch with the Public Utility Commission in your state first.

[HopeHoops]

5. Depends on the state. You can't even get LIHEAP unless you make under $25K.

The interest charge is valid if there's a float in the billing cycle. I know some states (don't know which) forbid it, but it's still common.