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Southern Water facing £20.3m fine | Southern Water facing £20.3m fine |
(40 minutes later) | |
The water industry regulator, Ofwat, is planning to fine Southern Water £20.3m for "deliberately misreporting information" about its performance. | The water industry regulator, Ofwat, is planning to fine Southern Water £20.3m for "deliberately misreporting information" about its performance. |
The misreporting meant that Southern was able to raise its prices by more than it should have done, Ofwat said. | The misreporting meant that Southern was able to raise its prices by more than it should have done, Ofwat said. |
The fine is also for poor processes and systems that meant "customers received poor service", the regulator added. | The fine is also for poor processes and systems that meant "customers received poor service", the regulator added. |
Southern's chief Les Dawson told the BBC the firm accepted the fine and was "really sorry" for the mistakes. | |
Southern Water provides water and waste-water services in Kent, Sussex, Hampshire and the Isle of Wight. | |
'Deception' | 'Deception' |
Southern Water uncovered problems in the reporting of service standards in October 2005, and reported them to Ofwat and the Serious Fraud Office (SFO). | |
We accept this fine - we have no arguments with it Les Dawson, Southern Water chief executive | |
The problems related to response times for billing inquiries and service complaints from customers. | |
According to Ofwat chief executive Regina Finn: "Southern Water deliberately misreported its customer service performance to Ofwat and systematically manipulated information to conceal the company's true performance over an extended period of time. | |
"The company benefited directly from this misreporting at the last two price reviews, meaning Southern was able to increase its prices by more than it should have done," she added. | |
"Customers received higher than necessary bills because of the company's deception." | |
Ofwat noted that Southern Water had taken "prompt" action once it discovered the misreporting and had returned money to customers who had paid higher bills than they should have done. | |
The SFO began an inquiry into the incident, but dropped it in April this year because of insufficient evidence for a criminal prosecution. | |
Paying back | |
Southern Water said it had repaid more than £500,000 to customers who had lost out and apologised for the misreporting. | |
"I don't think we feel hard done by," Mr Dawson told the BBC. | |
"In my view, the biggest crime you can ever have is to deceive your customers. Customers are the lifeblood of the business," he added. | |
"We accept this fine - we have no arguments with it." | |
Ofwat said that Southern's shareholders would bear the entire cost of the fine, and that it would not be passed on to customers. |