Thats punitive... You can't deny someone something because they might be fraudulant later.
If the person does not pay for a service, they do not suddenly get to use that service when they suddenly need that service. Financially it just won't work. Services need to be maintained in order to function properly - if no one contributed money to maintain those services, those services can't function, and when suddenly someone needs that service, it can't simply appear out of thin air. If someone doesn't help pay to maintain the service, they shouldn't get to use that service when they know they aren't covered by it by not paying and they still refuse / forget / whatever to put money into that service, which, again, needs to be maintained.