DETROIT—Rochelle McCaskill was in her bathroom about to rinse the soap off her hands when the water stopped. Slowed by lupus and other ailments, she made her way to a bedroom window, peered out, and spotted a guy fiddling with her water valve.

"There must be a mistake," she yelled down.

McCaskill explained that she had just paid $80 on her $540.41 overdue bill, enough, she thought, to avoid a shutoff. The man wasn't interested in the details. He cranked off her water and marked the sidewalk by her valve with bright blue spray paint, a humiliation inflicted on delinquent customers that McCaskill likened to "a scarlet letter." Then he drove off in a truck with the red, white, and black logo