18/09/2003

Water regulators consider options on bill payments

WaterVoice and Ofwat today published the findings of research which recommends extra charges, more vigorous recovery action or other sanctions as ways to encourage customers to pay their bills.

The qualitative research, carried out during the summer by Accent Marketing and Research, was commissioned jointly by WaterVoice and Ofwat - in consultation with Water UK - against a background of rising debt in the water industry.

The levels of outstanding bill payments, the amount of revenue written off, the numbers of customers in debt and expenditure on debt collection by the water industry have continued to rise since 1998-99. The total household revenue outstanding for up to 48 months for 2002-03 stood at £781 million, an increase of £115 million (17%) since 1998-99.

WaterVoice and Ofwat have been exploring ways to tackle this growing debt problem and "wished to gain a better understanding of how customers viewed paying their water bills", and to identify ways in which the water companies could encourage customers to pay bills promptly and regularly.

Along with fines and more efficient bill recovery methods, the need for frequent and effective communication between the water company and customers also emerged as a key factor in encouraging prompt and regular payment of bills.

The research found that rent/mortgage and Council Tax were seen as the top priorities, with water featuring alongside gas and electricity as the next most important items. However, customers with water debt often had multiple debts and were continually juggling which bill to pay next, and how much – which was commonly described as "robbing Peter to pay Paul".

Maurice Terry, WaterVoice Chairman, said: "The research has provided some useful insights which could help to improve and focus the companies' efforts in collecting payment of water and sewerage bills from their customers.

"We will seek to ensure that the water companies' debt management and recovery approaches are tailored to collect outstanding revenue as effectively as possible, so as to minimise the cost of debt recovery which is borne by customers."

(gmcg)

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