Claim interest on money refunded?

Kacey101

We have just finished convincing our water supplier that our 'surface water' is drained on site rather than via a public sewer and we have received a refund for each six-monthly Bill since 2006.
This has resulted in a nice little refund (especially just before Xmas) but should I also be able to claim interest on the accrued overpayments?
Thanks Kacey

Cardew

Welcome to the forum.


Actually in law you have not overpaid. The Water Act(of Parliament) clearly mandated that the water companies had to charge for Surface Water Drainage(SWD) and the onus was on the customer to claim relief. This was because the water companies had no idea of the SWD position on many houses - like many occupants! So if a customer didn't claim it was their fault. How to claim was included in the small print that came with the bill(which none of us read!) - ignorance of the regulations being no defence etc etc.


If a person successfully claimed relief from SWD charges, the charges were refunded to the beginning of the financial year(April). That was the position laid down by Ofwat the Government Regulator.


However a couple of years ago Ofwat changed their stance and stated that where the water companies should have known that a SWD charge was unlikely to be correct, they could backdate the relief 6 years(like any debt after 6 years it is Statute limited)


You need to appreciated the way water companies are funded. Their revenue and hence profit is fixed by the Regulator. So if you and thousands of others get a 6 year refund and the water company pays out, say £1 million, they simply raise charges slightly for all other customers to compensate for that £1 million loss of revenue.


The reason Ofwat gave for restricting backdating to the beginning of the financial year was that to backdating for several years would mean that new customers would be, in effect, paying increased charges today for the years when they were not customers. e.g someone who started paying water charges today would be picking up extra charges that should have been paid by customers over the past 6 years.


So the position is that the law laid down everyone should initially pay SWD charges, and it was up to the customer to claim relief; if they didn't they were at fault.


Now it has been decided that in some cases these customers who didn't claim, will get 6 years of refunds, and those refunds will be paid for by all current customers.


Obviously a nonsense, as indeed is the whole business of SWD. However nobody blames anyone for taking advantage of this stupidity. Although you are obviously not entitled to interest on the refunds(NOT overpayments) you might as well try and it might be paid as a goodwill gesture. After all it doesn't matter to the water company, any money paid to you will come from other customers!

Kacey101

Excellent. Many thanks for taking the time to provide such a thorough and informative response.