Thames fined for misreporting

Thames Water has been fined £9.7m for poor customer service and misreporting information to the industry regulator.


The misreporting took place over a 12 month period during 2005 and 2006 and the fine amount s to 0.7% of the company’s turnover, down slightly from the figure originally proposed by water watchdog Ofwat.

The watchdog accepts that the shortcomings were errors rather than intentional wrong-doing.

The bulk of the fine, £8.3m, relates to the misreporting while the remaining £1.4m is due to poor processes and systems that led to substandard customer service and some customers missing out on payments they were entitled to.

In total the fines amount to 0.7% of the company’s annual turnover. The biggest fine Ofwat can impose on a company is 10% of its turnover.

Regina Finn, chief executive of the watchdog, said: “Thames Water’s systems and processes were inadequate and customers lost out.

“The penalty reflects the importance we attach to reliable, accurate and complete information and gives a clear signal to both the company and the water sector that non-compliance is not a cheap or easy option.”

Thames Water’s shareholders will bear the entire cost of this penalty. It will not be passed on to its customers.

Thames Water chief executive David Owens said: “We are pleased that Ofwat have accepted our representations on the level of the fine. This is still a high figure considering that the failures were unintentional, rather than deliberate, but we welcome the reduction.

“Although all the misreporting took place under previous ownership and management, we always acknowledged the company should be held accountable for these failings, but argued any penalty should be proportionate to the harm done to our customers and the efforts we had taken to make amends.

“We not only accepted responsibility for the errors, alerting Ofwat as soon as we became aware of them, but also voluntarily took all appropriate steps to investigate and rectify the failings and to compensate customers over and above the statutory requirements.”

Sam Bond

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