Water Charges: Advance Payment Enforcable?

[samsmoot]

Can water companies force payment of charges in advance? They ask 6 months in April, then another 6 months in advance after that.

Has anyone looked at the letter of the law on this? Would anyone like to? it would be helpful if it could be shown that a claim for advance charges succeeded in the county court after being defended properly.

I see it like this: they can ask for what they like, but where is the law that says you have to comply? Section 143 of the Water Act 1991 is the relevant legislation (with amendments). The Act appears to put no onus on the consumer to pay charges in advance - only that charges can be fixed and recovered.

I have been debating this on another forum, but I guess here is where the legally minded people go, so over to you. Analogies have been made with Council Tax etc, which you do have to pay in advance - but that's my point - the legislation is clear on CT and there are penalties involved, not so with water charges.

If my water co. took me to court over unpaid advance charges, where would they point to and say, 'that gives us the authority to recover advance charges'?

[charitynjw]

Re: Water Charges: Advance Payment Enforcable?

Hi samsmoot,

For sake of clarity, is this a 'you must pay' situation (ie, is payment in advance demanded), & if so, is there any indication in the request of consequences if payment in advance is not made?

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

Hi samsmoot,

For sake of clarity, is this a 'you must pay' situation (ie, is payment in advance demanded), & if so, is there any indication in the request of consequences if payment in advance is not made?

Hi charitynjw,

Yes, there has been a threat of court action in the past for non-payment of advance charges. I am not under such a threat at the moment - I just seek clarification of the legal position for my records.

[enaid]

Re: Water Charges: Advance Payment Enforcable?

This is rather like Council Tax, that also is paid in advance even if you pay monthly as you pay from April to March but your last payment is in January.

[charitynjw]

Re: Water Charges: Advance Payment Enforcable?

It certainly seems that, if there is legislation covering this, it is a well-kept secret!

I have found several references to the supply of unmetered water being assessed & charged on an 'advance' basis, &, to be fair, references for payment to be spread over a period if full payment in advance is difficult.

I have not yet found any 'authoritative' Act, Regulation, etc which enables advance payment.

Stating the obvious, samsmoot, have you asked the utility provider, Ofwat, Consumer Council for Water et al?

[labman]

Re: Water Charges: Advance Payment Enforcable?

Looking at this from a totally different angle, water bills are no longer considered a priority debt as they are not allowed to disconnect your supply. They are, after a lengthy period of time, allowed to restrict it.

Given this is the case, if you choose not to pay for 6 months and pay in full at the end of the period, it's hard to see what they could do to make you pay if the law does not specify they have a right to charge you, and they are not allowed to cut you off.

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

Stating the obvious, samsmoot, have you asked the utility provider, Ofwat, Consumer Council for Water et al?

No I haven't - wouldn't expect they would agree with my thinking. I think they would support the position of the water companies.

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

Given this is the case, if you choose not to pay for 6 months and pay in full at the end of the period, it's hard to see what they could do to make you pay if the law does not specify they have a right to charge you, and they are not allowed to cut you off.

Exactly my thinking, labman. The more I look at the Water Act 1991 etc the more I am convinced of my position.

[charitynjw]

Re: Water Charges: Advance Payment Enforcable?

No I haven't - wouldn't expect they would agree with my thinking. I think they would support the position of the water companies.

Sorry, I wasn't very clear - I meant, have you asked them "under what authority do you have the right.........etc".

No harm in asking, & could lead to an interesting answer!

[charitynjw]

Re: Water Charges: Advance Payment Enforcable?

Thought you might be interested in this, samsmoot.

http://www.credittoday.co.uk/article...bad-debt-issue

Sunday 8 January 2012_2:34pm

Online news: Water industry tackles bad debt issue 5 January 2012



Water firms and their customers face lower bad debt exposure in 2012 after Water UK revealed it would facilitate data-sharing on tenants in rented accommodation.
Water UK, which works on behalf of UK and European water suppliers, will launch a web portal later this year for landlords to provide information about tenants renting their properties, which will be passed to the relevant water supplier.
This will allow water firms to bill more accurately, thus reducing the significant bad debt charges incurred on privately rented properties, where tenancy changes frequently result in charges left unpaid.
The cost of these unpaid debts are often absorbed by passing on higher charges to other customers.
In a Water White Paper published in December 2011, the government said these costs added an average of Ł15 to the bill of every water customer.
The issue is compounded by water firms being unable to disconnect the water supply, limiting their options for effective recovery of outstanding debts.
Rob Wesley, policy adviser at Water UK, told Credit Today that the organisation would launch the portal later this year after a suitable provider had been found to build it.
He added that Water UK would consider introducing it on a voluntary basis, with a view to making its use compulsory for landlords.
This would depend on the government passing a law requiring landlords to pass tenant details to water companies, a move it is expected to consult on this year.
“What is needed is a compulsory data set,” said Wesley. “The idea is something we have been working on for some time, as a lot of bad debt problems in the water industry stem from the private rented sector.”
The portal would be funded by the water industry, but would be free for landlords to use.
Wesley added: “It is likely there will be some development costs and a few ongoing running costs.”
The move was revealed in the Water White Paper, published by the government in December 2011. To read the full document, visit: http://www.official-documents.gov.uk.../8230/8230.pdf

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

No I haven't - wouldn't expect they would agree with my thinking. I think they would support the position of the water companies.

OK - maybe I should ask OFWAT and the CCW just to see what they have to say on the matter - I will do this in a abit.

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

Thanks for the links, charitynjw - yes, very interesting. Para 5.18 is the relevant part of the PDF.

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

I said:





'Dear CCC,






I was wondering if you could clear something up for me? Can consumers be forced by to pay in advance for their water charges?



I believe that most water companies ask 6 months in advance in April and October - is this enforcable? I can find no law or anything which provides for the recovery of advance charges, and I do not believe that a county court judge would ever order payment for services which have not yet been used.




Would it be possible for you to advise me of the legal position? I would like to know that if I did refuse to pay advance charges that I would be correct in doing so. I would not want to end up in court without a leg to stand on.




If it is the case that advance charges are unenforcable, then I wonder why water companies are allowed to threaten court action for advance charges - and if the CCC would be prepared to do anything about it?'


Their reply was:





'Thank you for your email to the Consumer Council for Water (CCWater). CCWater is the statutory consumer body for the water industry in England and Wales. We are independent of the regulator, Ofwat, and independent of water companies.

Through sections 142 and 143 of the Water Industry Act 1991, water companies can collect charges for the provision of water services. While the Water Industry Act itself does not specify that charges can be collected before or after the service is delivered, companies are empowered to make a charges scheme (which is approved annually by Ofwat). All companies typically require in their charges schemes that their customers pay non-metered charges in advance. Metered charges are raised in arrears and are due from the date the customer’s meter is read.


To answer your question about enforcement, CCWater is aware that water companies have successfully pursued many customers through county courts for failure to pay charges in advance. The ultimate sanction against customers is a county court judgment (CCJ) and if payment is still not forthcoming, a court enforcement order for bailiffs to recover goods.


By the way, it is illegal for a water supply to an occupied domestic property to be disconnected or restricted.


I would not recommend that you refuse to pay your water charges in advance or you risk debt collection action being taken against you. Besides, there is a way around paying in advance. All companies actually offer a range of payment methods and time scales. By agreeing a payment plan with the water company, the charges due in advance are effectively deferred over the length of the plan without any additional interest charges. Many companies offer 12 month plans, but some offer 8 or 10 month plans. Others will allow customers to make smaller weekly payments. Payment plans can also be set up for metered charges. We believe that these payment facilities offer customers a reasonable mechanism to make manageable payments. Usually on the back of your bill, there is information on how to contact your company’s billing department to set up payment plans.

Sometimes payments are received by the company late, or payments get misdirected. A late or missing payment can prompt the water company to send automatic debt collection notices, some of which refer to court action. Usually, if there has not been a consistent failure on the part of the customer to make regular payment, the water company will be amenable to reinstating the failed payment plan.'


If you have any other questions, or a specific complaint about your water company’s customer service, do let us know and we will be pleased to help you try to resolve it.'

So a pretty comprehensive answer and the CCC is sure that judgements have been made for advance charges. So is that it then? Can these successful claims be looked up? Could it be that they were not defended properly? I'm not been stubborn, I just desire to be certain one way or another. I wonder what letter of the law was relied on by the water companies? I do get that they can make a charges scheme, and that this will be approved by OFWAT - the fact that these charges schemes are said by the CCC to require advance payment does not mean they actually do - do they? They can ask, but is the consumer required to give? According to the letter of the law, that is? Let's pretend it's just academic and for the sake of argument - how does the letter of the law read to you? Would it be foolish to defend yourself against a claim for advance charges? It does seem so in light of the above - I'll have to retract any advice I have given to others in the past regarding this - if I am wrong i will need to own up to my error.

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

I mean the CCW - silly me.

Should I grill the CCW further?

[samsmoot]

Re: Water Charges: Advance Payment Enforcable?

OFWAT's reply:

'Thank you for your email to Ofwat with regard to companies asking for an advanced payment for services.


S. 142 of the Water Industry Act 1991 allows undertakers to fix charges for their (regulated) services, and to demand and recover those charges. Section 142 (4) says that ‘… a relevant undertaker may fix charges under this section by reference to such matters, and may adopt such methods and principles for the calculation and imposition of the charges, as appear to the undertaker to be appropriate.’


These charges are made into a charges scheme under section 143 of the Act, which have to be approved by Ofwat. Charges schemes are allowed by section 143 to contain ‘… provision with respect to the times and methods of payment of the charges fixed by the scheme.’ Therefore nothing would preclude a company from charging in advance of services, within in the charging year.


I have copied in the link to the specific legislation for reference purposes:
http://www.legislation.gov.uk/ukpga/1991/56/contents


If you are an unmetered customer it is normal practice within the industry to be presented with an annual or half-annual bill in advance of water/sewerage service. Where customers are metered then bills can only be billed in arrears but it is possible that a company may seek to recover any standing charges in advance. Even though unmetered customers are essentially paying in advance it may not necessarily be unreasonable as a household customer cannot be disconnected and, excepting in times of drought etc., has a ‘guaranteed’ service.


The company codes of practice on debt recovery require companies to offer instalment arrangements to fit a customer’s budget and at least one method of cash payment which does not include a handling fee. It is the customer’s responsibility to make arrangements with their water company on the best methods and provision of payment. All companies put their charges schemes on their web sites, and this might be a good place for you to see how your charges are applied and payment methods.'

I'm afraid I still do not see a compulsion for the consumer to pay advance charges. Am I misreading it? What part of the above exactly gives a right to recover advance charges - is it OFWAT's approval? Because apart from this the powers given are no more than any other business has anyway, ie the power to charge for services given, to fix how and when the charges will be applied etc. Am I totally misguided on this? Do we have a judge on here?