Recompense due from Severn Trent?

forget-me-not

Hello all, new here, hope someone can offer advice - I have searched the forums and have not found a similar query.

We moved into our house in 1999. Today received notification from Severn-Trent (ST) that from then until 2007 they had been wrongly charging us for surface drainage. In view of this we are being refunded almost £500.

Yes, £500 - like a small lottery win - yippee! But then we began to think..... £500 of our money multiplied by however many other affected residents.... held for 6 years..... hmmmm....

I have a few questions - first is this actually legal? If they had been taking the money off us in error for 8 years should we not expect some recompense - at the very least the going rate of interest for the amount, both for the period when it was being paid AND for the intervening 6 years?

Surely, when they stopped taking the money off us - they stopped as the mistake had been realised? That being the case - why not refund us then? Why the 6 year interval??

Rapidly, the 'bonus' takes on a nasty taint......

I would be interested to hear from anyone else who has experienced something similar, and from those who have any advice/suggestions, as to how we should proceed.

Thanks for reading,
F-M-N

Cardew

Welcome to the forum.

There are loads of threads on this subject.

The Water privatisation Act laid down that the 'default' position was that customers were to be charged for Surface Water Drainage(SWD) and customers had to claim relief from this charge.

You will see in many of the earlier threads the Regulator(ofwat) specifically backed the stance of all companies that they would not backdate relief from that charge. They gave reasons for that support of the companies' position.

Essentially their reasoning was that to backdate compensation would mean that the money would need to be raised by an additional charge on current customers - and why should they be penalised if they had just started to pay water charges(e.g. first time owners/renters)

However Ofwat have now changed their wording on this subject and say compensation should be backdated where the water companies should have known that the charge was inappropriate. Presumably an example of this would be an estate of houses built at the same time where some had earlier claimed relief, and others haven't.

A couple of people have posted that they have managed to get backdated compensation. However they claimed and yours is the first case that I have read where compensation has be paid without a claim - unless a third party claimed on your behalf. e.g. council)

There are a couple of points about your post. Firstly that they were not taking 'money from you in error'; the provision of the Water Act was that it should be paid unless the customer claimed relief.

Secondly the law states you can only claim back 6 years(5 in Scotland)

You should also appreciate that the water companies make no additional money from claiming for SWD. Their revenue levels and hence profit are strictly controlled by the Regulator and if, say, £1million less in SWD charges was collected, they simply raise other charges to compensate. Your £500 will eventually be paid for in increased charges!!

The above might sound like I am defending SWD. However nothing could be further from the truth; it has always been an absolute nonsense. For instance why should every occupant of a, say, 20 storey block of flats pay the full SWD charge.

Different companies have different ways of charging for SWD - and the amount collected varies tremendously. With Severn Trent a little detached bungalow with little land pays the highest rate - the same as a huge mansion with several acres.

When the Water Act came into force it was appreciated that the situation on SWD charges was a problem and the companies were given 10 years to come up with a better solution. This provision was quietly dropped by amending the Act.