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Water consultants question – Why does OFWAT allow water companies to overcharge customers and they dont have to refund all historical overcharges?
For years now, probably unbeknown to many commercial customer their rights to be refunded all historical overcharges have been eroded away, the regulator OFWAT has allowed the water companies to get away with it. Water consultants are becoming more and more frustrated with the situation, just take a look at a few examples: –
* Severn Trent Water – This company charge for the collection, treatment and disposal of rain water (you may know this as surface water) based on site area, if it can be demonstrated that the water company has got it wrong and the area charged for is actually less a reduction in the area based band charges can be applied for. More often than not it is wise to enlist the expertise of water consultants for peace of mind as an audit will reveal an over or undercharge. Now if the water company have overcharged for say 6 years Severn Trent Water will only refund back to 1st April of the current financial year!
Here is the example of this: –
Customer is charged on a measured site area Band 21, the chargeable area is 50,000 – 99,999m2 with an annual charge of £ 47,262.96, consultants survey the site and ascertain the charges levied are incorrect and the actual chargeable area should be Band 15 with a site area of 20,000 – 24,999m2 annual charge £ 14,094.64.
Band 21 charge £ 47,262.96 Band 15 charge £ 14,094.64 therefore the over charge is £ 33,168.32.
The water companies financial years are April to March so if a claim is made say 31st March of the financial year and is approved the customer would received a refund of £ 33,168.32 but if the application is made one day later say 1st April the customer will received 1 days refund £ 90!
The next quite alarming fact is if the customer was overcharged 6 years only a 1 years refund is given, the previous 5 years overcharge which would be over £ 100,000 is not refunded and yet the regulator OFWAT must have agreed to enable the water company to incorporate this into their scheme of charges.
Further more extreme cases can be found in other water company areas such as United Utilities, a water company serving areas in the North West.
Here is an example of this: –
Customer is charged on a measured site area Band 14, the chargeable area is 125,000 – 149,999m2 annual charge for surface water and highways drainage £ 171,871.80, again water consultants survey the site and draw up a plan and the actual site area measured 75,000 – 99,999m2 annual charge £ 109,373.08 (don’t you just love the .08) making the total overcharge £ 62,498. Again United Utilities operate similar charging scheme in that if the claim is made on 31st March of the financial year the customer would received the full amount of 1 years refund, in this case £ 62,498, one day later only £ 171.22 the previous 5 years worth of overcharges would not be refunded a rough estimate well over £ 220,000!
This is very serious overcharging and has gone on for many years with OFWAT’s agreement, the Consumer Council for Water is powerless and has no authority. There are many other examples of overcharging, this situation would not be allowed in the Electricity or Gas companies would it?
If you feel you are being overcharged or have applied for a refund of overcharges and have been denied the full amount send your details to graham.mann@h2obuildingservices.co.uk all information will be treated in the strictest confidence.