PN 07/16 Ofwat publishes code offering increased protection for business customers

Ofwat has today (19 May 2016) taken the latest step towards opening the business water retail market in England from April 2017, with the publication of a new code of practice to protect eligible business, charity and public sector customers in England.

The Customer Protection Code of Practice sets out the minimum standards that all retailers will need to comply with when dealing with customers. If water companies do not keep to this code, Ofwat can take action against them – including fining them or taking away their license to retail.

The code will ensure that all business, charity and public sector customers have a continuous supply of water even if the contract with their existing supplier expires or isn’t rolled over. . It will seek to ensure minimum service standards are enjoyed by all eligible customers in the new market and it also requires all water companies to issue at least one accurate bill to their customers every year.

As part of the code, if customers have been charged the wrong amount, retailers can send catch up bills covering a period of up to 16 months only – down from the current six year threshold. The code also makes provision for micro-businesses – those with less than 10 employees – to arrange affordable repayment plans for outstanding bills.

As part of the code, micro businesses those with 10 employees or less – will benefit from other additional regulatory protections. Customers will have a seven-day cooling off period to change their mind or cancel a contract. Companies will not be able to roll-over a contract without the customer’s written consent.

Commenting on the publication of the code, Adam Cooper, Director of Economics at Ofwat, said:

“We are working hard to put in place all the necessary elements to ensure that next April the world’s largest competitive water market opens ready for business. In learning from the experience of other sectors opening to competition, we know it is important to have the right customer protections in place.

“The code we have produced will deliver the right, targeted safeguards, especially for smaller organisations, and in doing so will strengthen the new, competitive retail water market.”

Mike Cherry, National Chairman for the Federation of Small Businesses, said:

“The Federation of Small Businesses (FSB) believes competition in the water market must promote customer engagement, raise standards, promote innovation, and keep prices as low as possible. When the new water market opens, smaller business customers will require protections and assurances. They will also need relevant and timely information to help them make informed choices about their water provider. No small business should be worse off as a result of competition. FSB is pleased to have had the opportunity to feed into Ofwat’s plans, particularly around proposals for clear contract and billing information, and we look forward to ensuring the small business voice is heard in the debate moving forward.”

Ends

Notes for Editors:

  1. The code sets out the six principles water companies will have to abide by:
    • fair, transparent and honest – and put the customer at the heart of their business;
    • communicate with customers in plain and clear language;
    • provide appropriate and timely information to customers to allow them to make informed choices;
    • provide information that is complete, accurate and not misleading;
    • respond to customers in an appropriate and timely manner; and
    • make their customer services accessible and effective.
  2. A summary and full version of The Customer Protection Code of Practice can be found here.
  3. You can also download an infographic sheet which is suitable for print and web use, here.

For more information, please contact Helen Robinson-Gordon 0121 644 7617 [email protected]