CCW has got over a third of a million pounds back for more than 3,500 businesses in England. The consumer watchdog took the action after discovering the firms had been significantly overcharged on their bills when water retailers misinterpreted a change to Ofwat’s retail exit code made in 2020.
Thousands of customers supplied by Business Stream, Everflow, SES Business Water, Water Plus and Wave paid too much for their bills because of the mistake. CCW worked with those retailers to investigate how many businesses’ bills had been impacted, by how much, and pointed out that customers – many of whom were unaware of the error – were entitled to their money back.
Christina Blackwell, Head of Business Customers at CCW, said:
“While we accept that this was a genuine mistake by these five water retailers, it’s certainly not the customers’ fault. The economic climate is really challenging for many smaller businesses at the moment and they cannot afford to be overcharged.
“CCW was disappointed to find that some retailers were very slow to act and were not completely transparent about the number of customers who had been affected. We would have expected these retailers to act swiftly to do the right thing without CCW having to intervene.”
Some customers did end up undercharged due to the misinterpretation. But CCW is clear that this was not those businesses’ fault, so retailers should not seek to claw that money back.
The mistake in interpreting the code came when changes were made to the price cap protections for businesses who have not switched retailer, or agreed another contract with their existing supplier. This should have been applied as a maximum charge per customer – rather than as an average – from April 2020.
The incorrect application of these charges by 5 of the 16 water retailers who supply water to businesses in England resulted in some businesses paying more than they should for their water over a three-year period that lasted until March 2023.
In response, Lois Gill, Head of Regulatory Affairs, Everflow, told Water Magazine:
“As CCW knows, their story significantly misrepresents what happened – certainly as far as Everflow is concerned. We serve a small number of customers on default pricing, but in the case of the few that we do, we applied the old rules on default pricing in the way that we did because it was fairer.
“Instead of charging customers hugely varying amounts depending on their wholesale supply region, we used averages to charge customers in a consistent way no matter where they operate. This actually led to us losing more money than we gained. The new rules around default pricing have recognised and addressed this fairness issue.”