Southern water payoutWater company faces investigation

25 October 2005

A water company could be facing a multi-million pound payout over irregularities in the handling and reporting of its customer enquiries and complaints.

Southern Water estimates it may have to refund between 1.5 million GBP and 2.5 million GBP to customers after it uncovered the problems while installing a new billing system.

Southern, which provides drinking water to 2.3 million customers in Kent, Sussex, Hampshire and the Isle of Wight, and sewerage services to 4 million customers in a similar area, has launched an investigation and spoken to the Serious Fraud Office to see whether it should also investigate.

The problems were found in Southern's General Levels of Service procedures, which set standards for water companies to respond to customer calls and letters within certain time limits. If they fail to achieve these standards, customers may be entitled to up to 25 GBP as compensation. Water companies must also report complaints figures to the industry regulator, Ofwat.

Customers affected will be reimbursed

Southern has appointed the law firm Linklaters and a specialist team from accountants KPMG to investigate the inconsistencies. It says that it will ensure that any customers who have been disadvantaged will be contacted and reimbursed.

A spokesman added:'These inconsistencies relate to the reporting and handling of response levels to customer enquiries and complaints, and were discovered in the course of a project to install a new customer billing system.

'The company is determined to improve its service to customers. It is for this reason that it immediately alerted the authorities and is acting urgently and in full co-operation with them.'

Southern has also reported the issue to Ofwat, which said lessons must be learned.

'We are taking very seriously the statement made by Southern Water...about their irregularities in the handling and reporting of customer enquiries and complaints.

'Customers' interests must be protected. Southern Water has given us an assurance that customers who have been disadvantaged will be reimbursed. A priority will be to ensure that all the facts come to light and that lessons are learnt.'