Ofwat has published new guidelines for water companies to help household customers across England and Wales pay bills, get help and repay debts.
The new guidelines cover several areas, including requiring companies to:
- offer more flexible payment options for customers on irregular incomes and zero hours contracts;
- talk sensitively with customers struggling to pay to understand their circumstances and resolve problems without needing to take debt recovery action;
- use more complaints, research and other customer feedback to make real time improvements to payment, help and debt services; and
- make full use of data to find those customers who are struggling and offer them support.
The guidelines also cover other areas such as bereavement support, customer rights and debt recovery.
Research carried out by Ofwat in 2022 showed that just over half of water bill payers believe they will struggle to pay a utility bill over the coming year, rising to 7 in 10 if there are children in the household. Companies should speak to their customers in multiple ways to ensure that the support they offer is known.
Previous research from Ofwat also showed that water companies could do more to support customers with mental health issues – and making information about their services and bills more suited to customers’ needs. To tackle this the new guidelines include companies involving customers in vulnerable circumstances in the design of communications. Companies should also consider extra training for staff to deal sensitively with people with mental health and money issues.
Ofwat has called on water companies to work with each other and consumer and debt advice organisations to reach customers that are struggling, share best practice and improve services further. Doing so should lead to customers getting further help when they need it, including the offer of a social tariff that reduces water bills for eligible customers. The regulator is also requiring companies to update their practices on debt to reflect the new guidelines.
Emma Kelso, Senior Director, Ofwat, said:
“Many customers were struggling before the pandemic, and the current cost of living pressures are squeezing household incomes even further. We were pleased to see water companies step up their support during the height of the pandemic, and now that many more households are likely to experience financial difficulty in the coming months, we want companies to continue to go above and beyond for customers. “
“Our new guidelines are clear in what water companies can do to support customers. They can be making bills easier to understand and pay, helping those that need further support, and go further to help people repay their debt if they fall behind. By helping customers avoid falling into a debt spiral, companies can also help reduce bad debts and keep bills lower for everyone.”
Emma Clancy, Chief Executive of the Consumer Council for Water (CCW), said:
“These changes have the potential to bolster support for customers in or on the cusp of debt with their water company and we’re really pleased they align with some of the key recommendations from our independent review of water affordability.”
“The revised guidance will help to ensure debt support more closely reflects a customer’s individual circumstances, as well as encouraging greater consistency over the way people are assessed and treated. Putting more onus on companies to reach out to customers to see if they need support is also a vital step towards overcoming the barriers to existing help, including low awareness and a lack of trust.”
Alongside the updated guidelines, Ofwat is also bringing forward plans to develop a new customer-focused licence condition to increase companies’ customer focus and incentivise the very best service for customers
