Credit where it’s due

We want all businesses to be confident that their money is protected if their water retailer were to exit the market. As part of our ‘Credit Where It’s Due’ campaign we’re calling on Ofwat to bring in greater protections for businesses. We are also calling on retailers and companies to be clearer in their communications with customers about what credit they have on their accounts.

Understanding credit balances on your account

It may suit your business to pay your bill in advance or via Direct Debit. By doing so, your account may be accruing credit. In a lot of cases, you are unlikely to build up much credit if your water usage remains the same. However, if your businesses usage fluctuates, you may have a sizeable credit balance.

The cost of living crisis has significantly impacted many businesses, with many still struggling with outgoings, including utility bills. In these uncertain times, we believe everyone should have all the information they need to make financial decisions that best suit them. Businesses should have a clear understanding of how much credit is on their account. If you wish, this enables you to not only request a refund, but also to consider changing your payment method, if you are concerned that your current one is causing too much credit to build up.

Your rights

The industry regulator, Ofwat, is requires all retailers to provide the following information to all their customers who have accrued credit:

• The amount of credit on their account
• The nature of the credit (e.g., security deposit, an allowance refund, money paid in advance etc.)
• Advice on contacting the retailer to explore alternative payment terms or request a credit refund (if applicable)
• Information on the possibility of switching to an alternative retailer, if their contract allows it, in case they are not satisfied with the terms on offer.

This information has to be provided in writing to customers at a minimum of once every three months.

Since the requirement was introduced in July 2022, we have worked with retailers to ensure that they are communicating this information to you as clearly as possible. Alongside these requirements, it is also important that retailers refund your credit as quickly as possible, if that’s something you have requested. If this is not happening as it should, we will work with retailers to improve their processes.

Alternative payment options

Your business has the option to pay for water services in advance. This is often the case for business without a meter, but it can also apply to those on a meter too. Paying in such a way may suit your business. However, you may not have chosen this payment method if this is what your retailer’s default tariff is based on. You might prefer to pay in arrears, so it is important that you should be fully aware of the different payment options on offer from you’re retailer.

If you are paying in advance, there is also a small risk that the amounts you have paid will not be recoverable in the unlikely event that your retailer becomes insolvent and exits the market. It is vital that businesses are aware of the risks of paying in advance, as well as the benefits. Retailers should make this clear in order for you to make a more informed choice as to whether to continue paying in this way, or opt for an alternative.

Your rights

Ofwat requires retailers to inform all their customers paying in advance of the risks, and benefits, of this payment method. This needs to be done at the point of agreeing a new contract based on advance payment. If you already pay in this way, your retailer should provide you with something in writing on an annual basis, starting from 20 July 2022, when this requirement was introduced.

We believe this requirement is the right thing to do for those paying in advance, and we will be working with retailers to ensure that this is being communicated in a way that is understandable.

Annual refund of credit

The previous crisis in the energy sector has highlighted the risks of an open market. In the event your retailer were to become insolvent, there is a risk that any credit accrued could be lost. The current cost of living crisis means that most people cannot afford to lose money should this situation arise.

We hope that many businesses have become more aware of their credit levels as a result of the requirements previously introduced by Ofwat. However, we believe this should go further. This is why we continue to campaign for retailers to be required to refund customer credit on an annual basis. This will ensure businesses receive a much needed cash back, and stand less chance of losing this in the unlikely event of their retailer going out of business.

We recognise that customer choice is important and you may prefer to keep your credit on your account. This is why our campaign also includes a call for businesses to opt out of the automatic refund, if desired.

Your rights

Should you choose to switch retailers, it is important that any credit on your account transfers with it. As of 20 April 2022, Ofwat required this to happen within 60 days from the date your final bill was issued to you. If you have switched before this date, you might have credit on your account that was never refunded. If you are concerned that this situation might apply to you, we would urge you to contact your previous retailer for more information.

As part of our ‘Credit Where It’s Due’ campaign we’re calling on Ofwat to bring in greater protections for businesses. We are also calling on companies to be clearer in their communications with customers about what credit they have on their accounts.

Understanding credit balances on your account

It may suit your business to pay your bill in advance or via Direct Debit. By doing so, your account may be accruing credit. In a lot of cases, you are unlikely to build up much credit if your water usage remains the same. However, if your businesses usage fluctuates, you may have a sizeable credit balance.

The cost of living crisis has significantly impacted many businesses, with many still struggling with outgoings, including utility bills. In these uncertain times, we believe everyone should have all the information they need to make financial decisions that best suit them. Businesses should have a greater understanding of how much credit is on their account. If you wish, this enables you to not only request a refund but also to consider changing your payment method if you are concerned that your current one is causing too much credit to build up.

We advocate for companies to regularly communicate with their business customers, to inform them about the amount of credit on their account, and presenting alternative payment options that may be available. Companies should also process refunds as quickly as possible when requested. We have worked with the two companies in Wales – Dwr Cymru Welsh Water and Hafren Dyfrdwy – to ensure their processes for communicating with business customers on this topic are effective. We will continue to offer our support, where needed.

Annual refund of credit

The ongoing cost of living crisis, has caused financial hardship for many businesses. In a time where every penny counts, we believe that business customers cannot afford to be without any credit that may be owed to them by their water company.

We hope that many businesses have become more aware of their credit levels as a result of our campaign for companies to increase awareness of credit refunds. However, we believe more can be done and that’s why we are continuing to campaign for your water company to automatically refund your credit balance to you on an annual basis, unless you have specifically asked for this to remain on your account. We believe that most businesses will benefit from the financial boost that they will receive from this, so we will be working with Dwr Cymru Welsh Water and Hafren Dyfrdwy to introduce this policy over the coming months.