Anglian Water’s U-turn on �240 deposit charge

Bosses at Anglian Water have carried out a rethink on moves to impose a blanket �240 deposit charge on business customers deemed a credit risk following talks with the water watchdog.

The industry, is under pressure from regulator Ofwat to curb bad debts, which the government estimates adds �15 to every customers' bills, and last year Anglian Water began rolling out measures to carry out credit checks on business customers.

Under the deposit plans, business customers deemed to be high risk must pay a �240 deposit, which can be refunded only if subsequent checks conclude there is no further risk.

But fears have been raised that the credit checks, are catching out firms with an unblemished record in paying their water bills, because the checks are flagging up unrelated credit issues elsewhere.

And the EDP has learned that officials from the Consumer Council for Water (CCW) have also held talks with the company after receiving about 50 complaints and queries about the deposits.

One business affected the by the measures is Norwich Computers, based in Magdalen Street, which received a letter last month advising them of the new charge.

Director Chris Manley said although the company had previously been bought out of administration when trading as 'Progeny' about 10 years ago, he was bemused as to why Anglian Water had issued the deposit demand.

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'We've been trading as Norwich computers for years and paying by direct debit,' Mr Manley said. 'We've never been behind. We don't have any credit as we haven't applied for it. Neither directors have got any county court judgments. I'm a little bit bemused as to what's going on. I don't understand why they are starting to carry out credit checks on companies who are existing customers. If we were brand new customers who had never had an account with Anglian Water, I could understand it, but they are asking for a deposit equivalent to a year's billing. If the worst came to the worst and we ceased trading, we'd lock up the premises and walk away from it with a month's water, which is about �20. If it was an electricity company, I would be looking for another supplier.'

Ciaran Nelson, spokesman for Anglian Water, said the deposits were part of a package of measures introduced to tackle bad debts within the industry, but deposits for customers paying by direct debit can be reduced to �120.

'We need to protect ourselves, and importantly our customers, from the growing problem of bad debt,' he said. 'Unpaid bills add �15 each year to the charges of every bill payer, and it's only by taking steps to mitigate the risk of customers not paying that we can protect other customers.'

However he confirmed that the company had agreed to modify its stance after talks last week with the CCW while the charges against Norwich Computers would be waived because of the previously good credit history.

'Broadly speaking if the customer is paying by monthly direct debit, and if they are up-to-date with their bills and have no outstanding debt, then we will discuss the situation with them and they may not need to lodge a deposit,' he added. 'But if they do breach any of those terms, they will then need to pay the deposit.2

Steve Grebby, policy manager for the Consumer Council for Water, said: 'We've had some complaints about it and have taken it up with Anglian Water. We have raised several questions about it, and we are still in discussions with them to resolve some concerns about what they are doing.'