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Thames Water has agreed to pay more than £11 million to non-household customers and water retailers after an Ofwat investigation uncovered data inaccuracies at the time of market opening in 2017.
Incorrect customer information uploaded to the central market operating system (CMOS) led to erroneous bills being issued.
Following complaints, Ofwat investigated and found data provided by Thames led to discounts being removed for sewerage services, and water usage at unmetered premises being improperly calculated.
“Our investigation uncovered a multitude of errors with the way in which Thames Water handled its data before and after market opening,” said Emma Kelso, senior director at Ofwat.
“It failed to act, even when it became apparent from its own risk assessments or from complaints it received that there were concerns over the accuracy of its data. It should have done more to investigate and correct any errors. It’s unfair that customers and others in the market have borne the negative impacts of that.”
The company proposed a series of undertakings to strengthen its internal processes and controls around how it handles data and complaints. Ofwat was satisfied with Thames’ response and imposed a nominal £1 fine to reflect the compliance of the company and its willingness to rectify the issues.
The CMOS system is reliant on high quality data, which has caused frictions since the market opened in 2017, and something participants and market operator MOSL have worked to improve.
Warren Buckley, Thames’ retail director, welcomed Ofwat’s proposed decision to accept the company’s undertakings and impose a nominal penalty.
He said: “We’ve made good progress on the key points, which are designed to improve our processes and controls over data quality and how we manage complaints. We also recognise the accuracy of some of the data we introduced into the market when it opened in 2017 could have been better, and we are working hard to rectify these issues as part of our turnaround plan.”
Kelso added: “This case shows the importance of water companies being on top of their customer and operational data and is relevant across the whole of their businesses. The importance and value of data is growing, and company boards should be increasingly focused on this when providing their assurances that they are able to effectively provide their regulated services.”
Ofwat’s investigation showed incorrect data for almost 14,000 supply points that resulted in customers being over- or undercharged. This impacted retailers who entailed higher costs to rectify errors and in some cases lost customers.
The investigation concluded that Thames’ systems and controls were inadequate for planning, identifying and preventing errors, or to make appropriate timely corrections when complaints arose.
Buckley said the company will continue to work with the regulator through the consultation process and to make improvements to customer and operational data with retail market participants.
Water watchdog CCW’s chief executive Emma Clancy said compensation as well as reimbursement should be given to those affected.
“Billing and charging issues make up three quarters of business customer complaints to CCW, often caused by poor data,” Clancy said. “In light of this, CCW will not only be calling for reimbursement to be passed swiftly from retailers to customers, but for compensation to also be offered to the customers affected.”
Ahead of the market opening, Thames transferred its non-domestic customers to Castle Water in a £99 million deal in late 2016.
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