Water firms use 'unacceptable' debt collection tactics

Letters from water companies
Image caption Some of the letterheads used by water companies to chase customers in arrears.

More than half the UK's water suppliers have been sending their customers "unacceptable" debt collection letters, the BBC has learned.

The letters appear to be from an external debt agency, but are actually from the water companies themselves.

The news follows the revelation of similar practices in banks, energy firms and the payday lender, Wonga.

The water companies say they have a duty to tackle bad debt and the letters are sent only as a last resort.

Twelve of the UK's largest water suppliers told You and Yours on Radio 4 that they had taken part in the practice, while five said they are still doing it or might continue to do so in future.

Typically, the name of the debt collection company appears in large print at the top. Often the small print reveals it is linked to the water company, but sometimes no link is made.

Image copyright Thinkstock
Image caption Thames Water says its letters are "open and transparent"


Yorkshire Water has been sending letters to some customers in arrears under the name Rockford Debt Collections Ltd.

The stationery has since been changed.

While the large Rockford Debt Collections name remains, small print at the bottom now mentions the link with Yorkshire Water.

The energy regulator Ofgem, which has reviewed similar practice by energy suppliers, said that type of layout is still "unacceptable".

The water watchdog Ofwat has written to companies saying the same principles should apply to them.

As a result, Yorkshire Water says it has "temporarily changed" its approach. But it defended the practice.

"Any customer who receives a letter from Rockford would already have received three letters from Yorkshire Water urging them to get in touch, as well as a text," said a Yorkshire Water spokesperson.

Other water companies including Northumbrian Water, Affinity Water and Welsh Water stopped sending such letters earlier this year.


But the UK's biggest domestic water supplier, Thames Water, is among those continuing with the practice. Its letters, headed County Wide Collections, now state in three places that it is part of Thames Water group. Previously no such link was made.

"We try hard to engage with our customers in arrears. This is a long process, but our open and transparent letters do increase in severity," said a Thames Water spokesperson.

"When it gets to a final letter, we have found the use of an internally branded debt collection agency approach to be effective and cost-efficient," he added.

Ofwat says customers must not be misled or scared into making payments. It told the BBC it still had concerns about the practices of two water companies, but declined to name them.

"We're not saying don't pursue debt," said Gillian Guy, the chief executive of the charity Citizens Advice. "Clearly companies are entitled to do that, but we are saying that they really ought to do that honestly and with some sensitivity.

"These letters are about increasing the level of aggression to get payment and they're made on the assumption that people won't pay rather than actually that many can't."

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