[UK] Cutting off the water just won't wash

Posted October 1, 2007 in [Water]

Consumer groups say companies are intimidating customers and deliberately getting around the ban on debt disconnections.


Sean Coughlan and Rupert Jones, September 29, 2007, The Guardian - Water companies are legally prohibited from cutting off customers who
are behind with their bills - but Guardian Money can reveal there is
evidence of a growing pattern of firms trying to get around the ban.

Water companies are permitted to disconnect the supply in certain
circumstances - say, if the property is unoccupied. And Citizens
Advice says that, increasingly, firms chasing bills are threatening
disconnection on the grounds that the house has become empty when
they know - or should know - it is occupied.

We can reveal that new figures from industry regulator Ofwat
indicate there is cause for concern. They show that the number of
homes where the water has been cut off has leapt 130% in the space of
a year. One of the most common reasons given for disconnection was
"due to the premises being unoccupied".

One West Sussex family with four young children told us how they were
threatened with disconnection within 48 hours. They are customers of
South East Water, and received a letter from a debt collection agency
called Credit Solutions which stated the house seemed to be
unoccupied - and "in the interests of water efficiency and leakage
control," it would cut off the supply.

Yet the family was not behind with the payments; the company's own
billing system had failed to collect direct debits. "I felt
physically sick when I received the letter. It was so threatening,"
said the mother of the family, who lives in Cuckfield, near Haywards
Heath. "It was also the arrogance of the company that they thought
they could do whatever they wanted."

South East Water has been condemned by the Consumer Council for Water
for what it calls an "intimidating letter". The watchdog says the
company had been informed that the house was occupied and urged the
water company to pay compensation.

"They are entitled to disconnect a property if it is unoccupied. But
manipulating that right into a threat, when they know or ought to
know perfectly well that it is not unoccupied, is not acceptable,"
said the watchdog's regional chairman, Richard Sturt.

In response, the water company says it "apologises unreservedly" and
is changing how it writes to customers. But it admits that an
unspecified number of other direct debit customers might also have
been wrongly threatened with disconnection.

The consumer council says the disconnection threat is about
incompetence rather than a deliberate policy. But this is not a one-
off mistake. Consumer advisers say there have been other cases around
the UK where water companies have claimed that properties are empty,
with a similar pattern of using a debt collection agency.

Citizens Advice says its advisers have seen a "sustained level of
evidence" of the use of this "intimidation tactic" by a number of
water companies in England and Wales. "They use this rather devious,
underhand way to threaten disconnection when it's clear that these
properties are not unoccupied," says its social policy officer, Tony
Herbert.

These disconnections are not always stopped in time. In January,
Citizens Advice says a man with long-term health problems had his
supply cut off after the water company claimed his home was
unoccupied. It was reconnected after advisers intervened.

Confirmation that this tactic has been used has also come from Ofwat.
"This issue had been brought to our attention as the practice was
becoming more prevalent," says a spokeswoman.

As such, the regulator says it has toughened its guidelines on debt,
including a requirement that "companies should be able to demonstrate
they have made sufficient attempts to establish that the property is
empty" - for example, by visiting the address.

The ban on cutting the domestic water supply over non-payment was
introduced in 1999 on public health grounds. There were warnings from
health authorities that a rising number of disconnections could
increase the spread of diseases associated with poor sanitation.

Some will be concerned by Ofwat's figures showing that the number of
homes disconnected for reasons other than arrears rose sharply in
2006-07. Some companies have not disclosed figures - and several,
including Thames Water, say they didn't cut anyone off. However, two
firms that have seen huge jumps are Northumbrian Water and South West
Water.

If you received a letter saying you were to be cut off, you would
doubtless get straight on the phone. But making contact might not be
straightforward.

In the case of South East Water, there is no local office; contact is
through a call centre. It says this is about cutting overheads - but
the family threatened with disconnection says it meant lengthy,
frustrating attempts trying to talk to someone to resolve the
company's own billing problems.

Ofwat won't be surprised to hear that. In an overview of the sector
published last month, it said South East Water "performed badly when
dealing with customers".

It added that customers of the company and two other firms, Severn
Trent and Southern, experienced "significant problems with billing
systems, difficulties with telephone contact systems and delays in
the resolution of complaints".

However, regardless of poor service or high charges, customers cannot
choose another supplier: water companies are local monopolies.

The water industry organisation, Water UK, says there is no
deliberate tactic of trying to recover debts by claiming that
properties are unoccupied. But it says water companies that use debt
collection agencies should take great care over how these agencies
operate on their behalf.

It also points to the growing problem of payment arrears for water
companies - as increasing numbers of non-payers realise they will not
be cut off.