New guidelines in U.K. for dealing with household water customers in debt

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London, U.K. — (METERING.COM) — March 28, 2007 – New guidelines for dealing with household water customers in the U.K. who fall into in debt have been issued by the water and sewerage regulator Ofwat.

The first such guidelines were issued in 1992 and in subsequent consultations these have become less prescriptive to give companies flexibility in tailoring their practices to fit individual customers’ circumstances. The aim of the new guidelines, which are based on a consultation that took place late last year, is to reflect current operating practices and to ensure that there is an appropriate balance between protecting customers and the industry’s need to recover revenue.

The basis of the guidelines is that companies themselves must decide how revenue can be collected in the most cost-effective way. All customers must pay for the services received and companies have the right to collect this revenue. However, there is a balance to be struck between recovering debt, in the interest of all customers, and dealing sensitively with those customers who genuinely find themselves in financial difficulty.

The guidelines seek to set out how companies’ policies and procedures might best take account of customers’ needs and they are structured around a series of principles, with key recommendations as follows:

  • Companies should be proactive in attempting to contact customers who fall into debt as early as possible and at all stages of the debt management process, including providing at least two prompts for the customer to contact the company before progressing to debt recovery action and giving customers a reasonable time to pay their bill.
  • Companies should provide a reasonable range of payment frequencies and methods, and the entire range of options should be properly and widely advertised to ensure that customers can select the arrangement which best suits their circumstances. Moreover the network of payment options should be reviewed at least once every two years.
  • All correspondence sent to customers should be written in plain language, be courteous and non-threatening, but should clearly set out the action which the water company will take if the customer fails to make payment or contact the company, along with the possible consequences for the customer. The code of practice on debt should also be enclosed with reminders or details given on how a copy can be obtained.
  • When agreeing payment arrangements with customers, the customer’s circumstances should be taken into account wherever possible and reasonable enquiries as to the customer’s ability to pay should be made when setting up such arrangements. Also repayments should be set at a level that is realistic, given the customer’s circumstances.
  • Customers whose accounts are managed by debt recovery agents or some other form of billing agent should wherever practicable receive the same level of service and care as those whose accounts remain with the water company. Thus reputable companies that are licenced and abide by industry codes of practice should be engaged for debt collection and their performance should be audited. The potential consequences of customers having their debt managed by a third party also should be no more severe than if the service was provided directly by the company.