Thames Water is switching thousands of customers to monthly billing and requiring them to actively opt out if they do not want to change the way they pay, the company has confirmed.
The majority of Thames Water's 3.9 million household customers, who live across London and the Thames Valley, are currently billed every six months. But the company, which is struggling under a large debt burden, is rolling out a monthly billing scheme after running a six-month pilot involving 5,000 customers that ended in November last year.
The expanded scheme will run until this December and is expected to affect between 110,000 and 120,000 customers.
Who is affected
The new billing arrangement applies only to selected customers who have smart meters, which record water usage hourly and send the data electronically to Thames Water. About 1.2 million of the company's customers, just under a third, have smart meters. Standard meters, by contrast, must be read manually or are estimated, while many customers have no meter at all and pay a fixed rate based on the size and location of their home.
Smart meters are intended to produce more accurate bills and help homeowners monitor their usage, as well as spot leaks sooner when consumption rises unexpectedly. Some customers already choose to pay monthly through separate payment plans, which spread predicted or actual bills into instalments.
Customer's experience
Adrian Michaels, a media entrepreneur from Wimbledon in south-west London, said he only discovered he had been placed on the new billing scheme when he noticed an extra charge a month after making his usual six-monthly payment.
"In July I paid my latest six-monthly bill, which was £323. Then, in August, I got a monthly bill for £67," Michaels said.
After three lengthy calls to customer service, he learned he should have been given proper notice of the change and the option to opt out. When he first complained that he had received no communication, Thames Water told him he had requested the switch to monthly payments by email. He said he had done nothing of the sort, and no such emails could be found in either direction. It was only on the third call that Thames Water admitted he had been given incorrect information and that the company itself had initiated the transfer.
"Is the company doing this to as many customers as it can without asking to improve its desperately-needed cashflow?" Michaels said.
Thames Water's response
Thames Water said Michaels's account was moved to monthly billing on June 26 as part of the wider smart meter rollout, and that an email notification was sent on June 29, three days later. That email, the company said, would have explained he could opt out immediately if he wished. Thames Water confirmed it was not a customer-initiated request and that he had been wrongly told an email from him had triggered the change.
A company spokesman said: "We're very sorry to Mr Michaels for the inconvenience caused after he was moved to monthly billing as part of a smart meter monthly billing rollout involving eligible customers. We have reached out directly to explain the communication error."
Thames Water confirmed that customers enrolled in the scheme can opt out and return to six-monthly billing at any time. During the initial pilot last year, 11 per cent of customers opted out. The spokesman added that the scheme was not introduced to improve the company's cashflow, which reportedly carries close to £21billion of debt.
Watchdog's warning
A spokesman for the Consumer Council for Water, the watchdog representing water customers in England and Wales, agreed that the appeal of monthly billing is that it lets customers see the impact of changes in their usage more quickly. But the watchdog said it was vital that Thames Water communicates any changes to billing frequency effectively and ensures they reflect what customers actually want.
"Moving people to monthly bills and giving them the option to switch back is one thing; switching people and not telling them is unacceptable," the spokesman said.
Thames Water said Michaels was the only customer it was aware of who had been affected by the miscommunication, but added that any customers who are unaware of a switch to monthly billing, or who have issues with their account, should get in touch with the company.
