Why an Unpaid Internet Bill Can Get You Turned Down by a New Provider

On this page:

• Why do unpaid internet bills stop you from getting new service? ↓
• Assessing the accuracy of internet debt ↓
• What to do if you need internet sooner rather than later ↓
• How to resolve an old bill that’s stopping you from getting internet ↓
• FAQ ↓

You may assume that internet providers are rivals that don’t communicate, but when it comes to unpaid bills, this is not the case. “Internet providers often review a consumer's payment history before approving new service. Some use specialized reporting agencies, such as the National Consumer Telecom & Utilities Exchange (NCTUE), a specialty consumer reporting agency, which shares telecommunications and utility payment information among participating companies,” explains Tony Perkins, who owns a credit repair company in Laguna Niguel, CA.

Most major internet providers, such as AT&T, Xfinity, and Verizon are NCTUE members, but small internet service providers (ISPs), including those that service regional locales or rural areas only, are not often members, and don’t have access to your report.

If you have an unpaid TV, utility, or telecommunications bill from a major provider, the details of the debt are likely to be in your NCTUE credit report. Your account history, including unpaid closed accounts, will also be listed.

You can request free access to your NCTUE credit report. Your report will give you clarity about the debt you’re said to owe. Experts recommend looking it over carefully, because the debts included may not have accurate dollar amounts. In some instances, they may not even be yours.

If getting turned down for internet service has taken you by surprise, the debt you’re said to owe may be erroneous, or inflated by add-on “mystery” fees. Once you know what you’re said to owe, you can dispute unknown or overblown charges in writing to your former internet provider. You can also file a complaint with your state’s consumer protection division, or with the Federal Communications Commission (FCC).

In some instances, the debt may not be tied to your old internet account. This is most likely to occur to tenants or homeowners who have recently moved into a new residence, if the former resident didn’t formally disconnect internet. It may also happen if a former resident didn’t return their rented equipment, or refused to pay cancellation fees.

Internet bills are tied to individual accounts, not addresses. Even so, an internet service provider (ISP) may refuse you service if an old debt is associated with your new home. If you suspect this is your issue, reach out to the ISP directly. They’ll likely explain the problem to you, and provide you with a solution. Usually, all that’s needed is one primary and one secondary proof of residency document, such as: 

• Lease agreement
• Mortgage
• Utility welcome letter
• Property deed or land contract
• Bank statement
• Internet or cell phone bill
• Incarceration letter

You may also need to provide an ID, such as a drivers license. Some ISPs will require you to  supply your documents in person. Before you spend money on gas or bus fare, make sure to ask what you will specifically need, prior to your appointment.

You’ll likely know if the unpaid internet bill is yours, but check with other members of your household, or the responsible third party you thought was taking care of the bill each month. Unfortunately, the debt is legally yours if the account is under your name.

“Find out exactly what is owed and to whom, because the old ISP and a collection agency are not the same. Call the original provider first, and ask for the payoff amount, whether the account can be settled for less, and whether it will release the account once paid,” says Andrew Latham, financial planning expert.

“If an old internet bill has gone to collections, confirm that it's actually yours and the amount is correct. Errors occur when debts are bought and sold,” adds Marcel Bluvstein, the co-founder of a debt relief service in New York, NY.

If the ISP is willing to negotiate, Latham recommends:

1. Get the agreed-upon settlement in writing before you pay a cent.
2. Ask if the account will be reported as settled or paid in full, once the debt is cleared.
3. Then, before you sign with a new provider, ask the new ISP directly whether it checks unpaid balances with prior providers, so you are not surprised on installation day.

Like ISPs, collection agencies may also work with you on reduced, lump-sum settlements, or monthly payment plans. “When a debt collector contacts you, they're required to send a validation letter. This letter will state the amount owed, who it is from, and how you can dispute the debt. If you notice any issues, write to them within 30 days. You can find sample letters to use from the Consumer Financial Protection Bureau. Keep a copy of your letter, and send it by certified mail, so you have proof that it was received,” Bluvstein adds.

This process can take time. If an unpaid bill is stopping you from getting back online quickly, you have options. “Don't assume that having an unpaid bill means you're permanently locked out of internet service,” says Perkins. “Once you’ve taken the appropriate steps of identifying what's blocking approval and pursuing resolution, you’re likely to be able to reinstate service, either with the old provider or a new one. But if this doesn’t happen quickly enough, you can explore providers with different eligibility requirements, or look into prepaid internet options,” he adds.

Prepaid internet providers typically forgo credit checks, so you’ll be able to use one to get online without delay.

Like prepaid phone plans, prepaid internet is pay-as-you-go. Instead of getting a monthly bill for the prior month’s service, you’ll purchase a time block (usually 30 days) or data amount in advance. Prepaid internet plans don’t require contracts, so you can renew the plan if you choose to, as you go.  

Prepaid internet plans that don’t require a credit check include:

If you have an existing cell phone plan, you may already have built-in access to hotspot data so you can connect your devices to your phone’s internet. You can learn more about cell phone plans with hotspot data in our unlimited hotspot guide.

If not, you have the option of purchasing a hotspot hardware device, like a pocket-sized Wi-Fi router. T-Mobile’s 5GB LINKPORT data plan is only $5 a month.

Federal programs, such as USAC Lifeline, provide access to free or very low-cost internet for eligible households. Some states also provide this service to low-income households and to students of all ages. We cover low-income internet programs in this guide.

There are also non-profit organizations, such as EveryoneOn, that work with low-income households, students, seniors, and veterans on accessing low-cost internet and affordable computers. 

You may have to do some sleuthing to find the programs you’re eligible for. Check with your local elected representatives, to see if they can guide you in the right direction. Public schools also have lists of programs that offer free internet to households with children. So do many libraries.

And speaking of libraries, don’t overlook your local branch. Most have computers and internet you can access for an hour or more at a time. 

There’s always a way to make ends meet. Follow these steps to get back online: