Thames Water has agreed to pay more than £11 million to 13,800 non-domestic customers and water retailers after they were incorrectly charged.
It follows an investigation launched by regulator Ofwat after receiving a complaint which raised concerns about the accuracy of data provided by the water company.
In particular, the data submitted by Thames Water to the Central Market Operating System (CMOS) removed discounts that business customers had previously benefitted from for their sewerage services and incorrectly calculated water usage at unmetered premises which was used to calculate some customers’ water bills.
Ofwat found the data used to calculate the invoices for nearly 14,000 water supply points were incorrect, which resulted in some business customers being overcharged and others undercharged.
Its investigation also found the errors had a negative impact on retailers that faced increased costs and in some cases, lost customers as a result of incorrectly being blamed for the problems.
Emma Kelso, Senior Director at Ofwat said: “Our investigation uncovered a multitude of errors with the way in which Thames Water handled its data before and after market opening. It failed to act, even when it became apparent from its own risk assessments or from complaints it received that there were concerns over the accuracy of its data. It should have done more to investigate and correct any errors. It’s unfair that customers and others in the market have borne the negative impacts of that.
“I’m pleased that Thames Water’s proposed undertakings will address these impacts and put it on a stronger footing going forwards. Data quality is vital to a successful business retail market and the benefits that it can bring for customers. Water companies and retailers have legal obligations they must fulfil in ensuring the data they are responsible for is complete and accurate.”
In addition to the compensation package, Thames Water has proposed a series of undertakings which include strengthening its internal processes and controls relating to how it handles market data and complaints.
Warren Buckley, Thames Water’s retail director added: “We welcome Ofwat’s proposed decision to accept our undertakings and to therefore impose a nominal penalty.
“We’ve made good progress on the key points, which are designed to improve our processes and controls over data quality and how we manage complaints. We also recognise the accuracy of some of the data we introduced into the market when it opened in 2017 could have been better and we are working hard to rectify these issues as part of our turnaround plan.”