Ofwat may need to tackle poor retailers, says CCWater

Regulatory action may be required to tackle the root causes of growing complaints from businesses about their water and sewerage services, the Consumer Council for Water (CCWater) has warned.

The water watchdog saw another increase in complaints from disgruntled businesses and other non-household customers during the final quarter of 2018/2019, which ran from January to March. In the period CCWater received a total of 1,078 complaints, 95.4 per cent of which pertained to water retailers. The vast majority of complaints, 72 per cent, were made about billing and charges. Administration was the second most frequent area of concern, with 12 per cent of the total.

Since the water retail water market opened in April 2017, this quarter has been the second worse for complaints. This total number of complaints saw a rise of 42 from the 1,036 CCWater received last quarter, and an increase of 110 from the 968 in the fourth quarter of 2017/2018.

It is also the second successive year that the watchdog has seen a substantial increase in non-domestic complaints. Three of the largest retailers – Water Plus, Castle Water and Wave – accounted for almost four out of five of these cases, figures which the council says are disproportionately high for the market share of these companies.

Dr Mike Keil, head of policy and research at the CCWater, said: “Retailers and wholesalers have had enough time to address many of the same problems that continue to impact the service customers receive.

“We’re rapidly approaching a point where we may need Ofwat to step in and take action if there is evidence that companies have breached market codes or not met their obligations to customers.”

A spokesperson for Castle Water commented: “Our understanding from CCWater is that Castle Water’s complaints over the past year are roughly in line with the industry average – we look forward to seeing full data for the last year to understand exactly how we stand. Castle Water publishes quarterly updates on customer service so that customers can understand our performance in detail, and for Castle Water to provide our customers with details of new choices and system enhancements.

“For the year to 31 March 2019, Castle Water answered 338,886 calls with an average waiting time of 33 seconds. Castle Water offers customers a number of billing and payment options, including an innovative PAYG tariff and cashback for paying by monthly direct debit. Customer satisfaction with Castle Water’s service and choice is reflected in a 4-star TrustPilot rating and a TrustPilot trust score of 8.6.”

In an interview with Utility Week last year, Castle Water chief executive John Reynolds said that poorly written market codes were the source of the issues the company struggled with at the end of 2017. From September 2017 to February 2018, complaints about Castle Water were twice the industry average.

In response to CCWater’s findings, Ofwat senior direct, Emma Kelso, said: “We share CCWater’s frustrations and we agree that companies need to improve in a number of areas. We have taken steps to make our expectations clear – particularly in relation to addressing frictions across the market, which have a direct impact on the customer experience. For example, in November we sought industry feedback on wholesaler performance and priority areas for improvement, and we will be publishing our findings and next steps shortly.

“The industry will continue to challenge wholesaler and retailer behaviours and MOSL’s AMPR [annual market performance report] will help to shine a light on both good and poor performance of the trading parties in the market.

“In instances where we have concerns that trading parties are not meeting their legal obligations, we will continue to use the full range of our enforcement tools, both informal and formal where appropriate.”

CCWater claims it is now handling almost five times more complaints from non-household customers than before the market opened, and that these only make up a fraction of the much larger number of cases that are made directly to the companies.

In July, CCWater will publish a league table highlighting the best and worst performing retailers.