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Water firms face ‘significant’ fines for poor customer service under new powers

12 Feb 2024 3 minute read
Photo by Karolina Grabowska from Pixabay

Water companies could be fined up to a 10th of their turnover for poor customer service, under new powers given to the water regulator for England and Wales.

Ofwat said there are too many instances where customers feel let down and their supplier does not have their best interests at heart.

The chief executive of the watchdog, David Black, said: “From today we are putting water companies on notice to improve customer service and where we see failure, Ofwat can and will take action which could result in significant fines.”

Consumers

The organisation has been introducing new measures designed to protect consumers and the environment.

It already has the power to block companies paying out money to shareholders if they fail to meet performance standards, and can impose fines.

Ofwat said it thinks being able to dish out penalties to suppliers not treating customers fairly, triggered by a new licence requirement, will “deliver real improvements in customer service across the sector”.

“It is in the companies’ interests to put customers at the heart of their business and provide levels of service that increase customer satisfaction,” Mr Black added.

Customer satisfaction

The watchdog’s latest performance report showed there has been a fall in customer satisfaction across most of the companies it regulates.

A separate report by the Consumer Council for Water (CCW) in September found that Southern Water was the most complained-about company.

Complaints received by Southern Water were almost three times higher than the overall average for water and sewerage companies, while Thames Water’s were just over one-and-a-half times higher.

More than 230,000 complaints were made to water companies in England and Wales by households in 2022 to 2023.

Mike Keil, chief executive of the CCW, said: “Every water company should provide excellent customer service but too often through our research and the complaints we handle we see people being badly let down, particularly by poor communication.

“A complete change in culture is needed in some companies if we’re to improve people’s experiences and repair fractured trust, and the new customer licence condition can help to focus minds.”

Environment Secretary Steve Barclay said: “We expect water companies to ensure customers are properly supported when services are disrupted.

“Enforcement action for poor customer service is an important and necessary step to restoring trust in the water sector and has been made possible thanks to government giving Ofwat increased powers to modify the licences of companies in England under the Environment Act.

“We are driving forward more investment, stronger regulation and tougher enforcement through the Plan for Water and will continue working closely with regulators to improve outcomes for both customers and the environment.”


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Linda Jones
Linda Jones
21 days ago

Water companies need to be taken back into public ownership at no cost. The private companies are failing miserably

Jeff
Jeff
21 days ago

Fines all well and good but if they go to the treasury then no benefit to the people affected. That is if there are no legal challenges and this being more than pie in the sky.

Head of Ofwat, wonder who is in his circle on influences.

Evan Aled Bayton
Evan Aled Bayton
21 days ago

The companies as they exist should be forced to invest all their profits in infrastructure and environment protection until the service is appropriate. Ideally they should be nationalised or forfeited if they continue to provide poor quality water and sewage dumping.

Mab Meirion
Mab Meirion
20 days ago

‘They’ should introduce ‘Sin Bins’ for these ‘executives’…

hdavies15
hdavies15
20 days ago

If Ofwat wants to “fine” water companies make them pay it back to customers as a %age of the customers’ invoice rather than into coffers of government. Just wishful thinking on my part and not likely to ever happen.

Arthur
Arthur
20 days ago

Welsh Water is a not for profit organisation essentially owned by ourselves, the customers.

Y Cymro
Y Cymro
20 days ago

Privatisation of utilities was a huge mistake. There was no referendum when water, gas or electricity were sold off as suggested by that Conservatives chump Andrew RT Davies when argued against more Senedd was members. Oh no. That only applies when it’s something he disagrees with. But to be fair to him the privatisation of utilities occured long before devolution, he had hair, or was a Senedd member, although I’m 100% certain that this hypocrite was wholeheartedly behind Thatcher’s blinkered ideology when she in her deaththrows as Prime Minister sold off our water & sewage industry to in some case… Read more »

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