Thames Water to pay £11m after firms overcharged

20 August 2021

Thames Water has agreed to pay £11m in compensation to more than 13,800 business customers after they were incorrectly billed.

Regulator Ofwat said the issue dated back to 2017 when the water market for businesses was opened up.

Errors occurred after Thames Water transferred incorrect data into the core IT system underpinning the business water market, which retailers rely on to serve and bill their customers.

This led to customers being both over and under-charged.

Ofwat found the company removed discounts for customers and incorrectly calculated their water usage at unmetered premises. The regulator said the errors had a “negative impact” on retailers who have faced increased costs and, in some cases, lost customers as a result of incorrect bills.

In response Thames Water has proposed a series of undertakings which include strengthening internal processes and controls relating to how it handles market data and complaints.

Emma Kelso, senior director at Ofwat said: “Our investigation uncovered a multitude of errors with the way in which Thames Water handled its data before and after market opening. 

“It failed to act, even when it became apparent from its own risk assessments or from complaints it received that there were concerns over the accuracy of its data. It should have done more to investigate and correct any errors. It’s unfair that customers and others in the market have borne the negative impacts of that.”

Following Thames Water’s offer to pay compensation, Ofwat agreed to fine the water provider a nominal penalty of £1.

Warren Buckley, Thames Water retail director, said: “We welcome Ofwat’s proposed decision to accept our undertakings and to therefore impose a nominal penalty.

“We’ve made good progress on the key points, which are designed to improve our processes and controls over data quality and how we manage complaints.

“We also recognise the accuracy of some of the data we introduced into the market when it opened in 2017 could have been better, and we are working hard to rectify these issues as part of our turnaround plan.

“We will continue to work together with the regulator through the ongoing consultation process, and look forward to working with all market participants to drive improvements in customer and operational data as well as support growth in the retailer market.”

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