Water companies the latest to be outed for sending bogus debt collection letters
It seems no-one is safe from scam debt collection agencies. Hot on the heels of banks, energy companies and payday lenders, the latest industry group to admit inventing ominous debt chasers is the water companies, with more than half the UK's water suppliers copping to the practice..
Twelve of the UK's largest water suppliers told BBC Radio 4 that they had taken part in the practice, while five said they are still doing it or might continue to do so in future.
As in similar cases in other industries- described as “unacceptable” by the energy regulator Ofgem during its investigation- typically, the name of the debt collection company appears in large print at the top. Sometimes the small print reveals it is linked to the water company, but at other times there is nothing on the stationery to show this is effectively just a scare tactic.
Yorkshire Water has been sending letters to some customers in arrears under the name Rockford Debt Collections Ltd, and prior to Ofwat’s intervention, there was no link shown between Rockford and Yorkshire Water. Small print at the bottom now confirms a link. Thames Water, the UK's biggest domestic water supplier, was sending letters from County Wide Collections with no mention of any link. Their stationery now states in three places that it is part of Thames Water group. Northumbrian Water, Affinity Water and Welsh Water stopped sending such letters earlier this year.
But while consumer groups are getting shirty, and regulators are wading in, the water companies defended their actions, saying they have a duty to collect debts, and that this type of letter was a 'last resort'. Yorkshire Water says it has only "temporarily changed" its approach, defending the practice by explaining that "any customer who receives a letter from Rockford would already have received three letters from Yorkshire Water urging them to get in touch, as well as a text."
“We try hard to engage with our customers in arrears. This is a long process, but our open and transparent letters do increase in severity," agreed a Thames Water spokesperson, with absolutely no trace of irony over the use of the word transparent. "When it gets to a final letter, we have found the use of an internally branded debt collection agency approach to be effective and cost-efficient," he added, clearly viewing all customers in arrears as numbers that need adjusting.
And that is the problem that some campaigners against this type of behaviour have- the assumption that customers won’t pay, rather than they can’t. "We're not saying don't pursue debt," said Gillian Guy, the chief executive of the charity Citizens Advice. "Clearly companies are entitled to do that, but we are saying that they really ought to do that honestly and with some sensitivity.”
"These letters are about increasing the level of aggression to get payment and they're made on the assumption that people won't pay rather than actually that many can't" she finished. Ofwat itself says customers must not be misled or scared into making payments and told the BBC it still had concerns about the practices of two water companies, but declined to name them.
But while customers facing an energy bill of up to thousands are more likely to be simply unable to pay, does the same reasoning apply to water bills of a few hundred a year? The average UK bill in 2014 is £393 a year, which works out at under £40 per month, and therefore costs less than satellite TV, or many newer mobile phone contracts for as much water as you can drink, cook with, wash in and pour on your garden/car. Aren’t water companies, who are restricted in the action they can take (they can’t just cut you off like a phone provider can, for example) entitled to do whatever it takes to get the money they are legitimately owed? Answers on a postcard...