PN 34/05: Ofwat plans increased protection for water resale customers

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PN 34/05	21 December 2005
OFWAT PLANS INCREASED PROTECTION FOR WATER RESALE CUSTOMERS

Plans published today by Ofwat to strengthen the Water Resale Order will give people living in mobile homes and other tenanted properties greater protection in paying for their water supply.

The move follows a consultation exercise which Ofwat carried out earlier this year asking for views on how the Order could be changed to reflect new powers given to the Director General under the Water Act 2003. It also sought comments on other areas of resale which Ofwat believed could be strengthened.

More than 200 people and organisations responded to the consultation and gave broad support to Ofwat's plans.

The Water Resale Order protects customers who pay another person – such as a landlord or a mobile home park owner (the re-seller) - for their water and sewerage services rather than the water company direct.

Ofwat already has the power to fix the maximum resale price, either by specifying the maximum charge or describing how it should be calculated. These powers will be strengthened from 31 March next year.

The main changes which Ofwat will make to the Order are:

Re-sellers will have to tell each customer how their bill has been calculated;
Re-sellers will have to provide customers with relevant information to justify their charges. The request and the response will need to be in writing;
Where a re-seller fails to provide the customer with information within four weeks of a request being made, the maximum charge payable by the customer will be one half of the relevant water company's average household bill. This reduced charge will apply for the period of time that the information is not provided; and
Customers who have been overcharged should be paid interest on the overcharged amount in addition to recovering their excess payment. The interest will be paid at twice the Bank of England's average base interest rate for the period of time that they have been overcharged.

Notes to Editors:

1. The Director General of Water Services is the economic regulator of the water and sewerage companies in England and Wales. He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them.
2. An information leaflet, 'A Guide to Water Resale', is available on the Ofwat website, www.ofwat.gov.uk This will be revised to reflect the planned changes to the Order and will be re-issued before 31 March 2006.
3. Section 59 of the Water Act 2003 provides new powers which offer greater financial protection to resale customers against overcharging.
4. Ofwat has no enforcement powers in resale situations. Re-sellers and customers will need to take their own independent legal advice.

MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442
Out of hours enquiries to pager: 08700 555 500 water 502/503. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk

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