Paying Fair Guidelines to support customers facing debt recovery action

Paying Fair Guidelines to support customers facing debt recovery action

This page sets out our principles and minimum expectations for the services that water companies deliver to support residential customers facing debt recovery action. This is part of our Paying Fair Guidelines.  

7. Treat customers facing debt recovery action with care

Customers whose accounts are managed by debt recovery agents should, wherever practicable, receive the same level of service and care as those whose accounts remain with the water company. The potential consequences of having their debt managed by a third party should be no more severe than if the service was provided directly by the company. 

Treat customers facing debt recovery action with empathy, sensitivity and provide the same quality of service as other customers 

7.1 Treat customers facing debt recovery action with empathy, sensitivity and provide the same quality of service as other customers – regardless of their payment and debt history. 

Ensure the needs of priority service register customers are met 

7.2 Those customers registered by companies as requiring priority services should not have their accounts passed to debt collection agencies where an agent is not able to provide the service which the customer requires. Where a debt is passed to an agent and it becomes apparent that the customer requires priority services which the agent cannot provide, the account should be returned to the water company. 

Use reputable debt collection companies that treat customers fairly and in line with agreed levels of service  

7.3 Where companies choose to use external collection agents, engage a reputable agent to carry out debt collection. Agents should abide by industry codes of practice, treat customers fairly and in line with agreed levels of service.  

7.4 It is expected that companies will have systems and processes in place to ensure that its contractors are acting in compliance with its code of practice on debt recovery and meet the standards set out in the Financial Conduct Authority handbook – or equivalent publication. We would expect companies to ensure that these requirements are reflected in the contracted terms and arrangements when employing any third party to act on their behalf. 

7.5 Make sure that individual accounts are passed to one debt collection agent at a time. This will avoid confusion for the customer and potential duplication of effort by agencies.  

7.6 Make sure that a full and accurate history of the debt is passed to the debt collection agent. 

Regularly and robustly check customers facing debt recovery action are treated sensitively 

7.7 Be able to verify on a regular basis that customers whose debt is managed by a debt collection agency are sensitively dealt with through a robust audit process. This may include regular reports from the agent on the progress of customers’ accounts and payments.  

7.8 To satisfy themselves that their customers are receiving the appropriate level of service, water companies are expected to hold copies of standard communications materials sent by debt collection agents and make sure that these conform to the standards expected of the water companies themselves. 

Continue to communicate directly with customers facing debt recovery action 

7.9 Make sure that customers whose accounts have been passed to debt collection agents are kept informed of this action. Customers should not find themselves in a position where it is harder to agree payments than if they were dealing directly with the water company. The debt collection agent should offer the same range of payment options as the company wherever it is practical to do so. 

7.10 In some cases, it may be necessary to treat a customer’s current charges separately from any arrears. The company may wish to agree payment terms for the current bill directly with the customer while leaving the collection of debt in the hands of the agent. If this is the case, it is important to make sure that the customer fully understands that payments are due to both parties. Ideally, all charges should be collected together in order to avoid confusion for the customer. 

Retain access to the customer’s account 

7.11 Retain access to the management of the customer’s account, should the need arise, as the debtor will typically remain the customer of the water company. Good practice will allow water companies to be able to obtain access to the customer’s account and details such as the amount which a customer has agreed or has been asked to pay, should they be approached directly by the customer or by third parties acting on behalf of the customer, such as debt advisers. Regular and effective communication systems should be in place between the company and agent to share information regarding payments made or other activity on the account when necessary. 

Allow customers to raise disputes involving the agent with the water company 

7.12 Make sure that customers who are unhappy with the way the agent has dealt with them are:  

  • aware that they can raise their concerns directly with the water company; 
  • how they can do this; and 
  • that it is easy for them to do so.   

Speak to local authorities to find alternatives to evictions where non-payment of water charges could result in evictions 

7.13 Where eviction for the non-payment of water charges is a possibility, companies should have effective channels of communication in place with local authorities to make sure that such cases are discussed with a view to alternative solutions being found. 

Only sell debt to reputable parties and where other recovery activities have been exhausted 

7.14 Companies that choose to sell debt to a third party should only do so when all other debt recovery activities have been attempted.  

7.15 Make sure that you only sell debt to a reputable agent who abides by industry codes of practice such as that of the Credit Services Association and the guidance on debt collection issued by the Financial Conduct Authority in its handbook. 

Tell courts promptly when customers clear their debts  

7.16 Notify courts promptly when customers in relation to whom court enforcement orders have been made clear all or a substantial part of their debts. 

Demonstrate service levels to CCW 

7.17 Show CCW that customers whose accounts have been placed with agents are not receiving a lower level of service than customers whose accounts remain with the water company. CCW will also wish to confirm that companies have effective quality control arrangements in place. At audits it is desirable for CCW to have: 

  • access to the agent and their documentation, including copies of standard communications materials; and 
  • the option to meet the agent, visit the agent’s premises or look at individual cases as part of their regular assessments of companies’ debt recovery operations.  

7.18 The code of practice under which the agent operates and the service agreement or equivalent document should also be made available to CCW, provided there are no confidentiality concerns. 

Previous section: Paying Fair Guidelines to support customers in debt