Southern Water Fined £20.3 Million

Southern Water has been fined £20.3 million by industry regulator Ofwat for deliberately misreporting information and delivering poor service to customers.

Ofwat announced that Southern Water would receive the fine in November and confirmed it on Friday, following a 28-day consultation period.

The company's shareholders will bear the entire cost of the fine and it will not be passed on to the firm's customers.

Ofwat Chief Executive Regina Finn said: "Southern Water behaved unacceptable in deliberately misreporting customer service performance to Ofwat and systemically manipulating information to conceal its true performance over an extended period of time and the company has acknowledged this.

"The obligations on the companies to provide accurate and reliable data are designed to protect consumers in a monopoly environment. Without a choice of supplier, this protection is essential.

"We expect companies to comply with their obligations and this fine sends a clear message that non-compliance is not a cheap or easy option."

Southern Water issued a statement which said: "Southern Water is confident today's announcement will conclude the issue which resulted in a two-year investigation initiated by its new management team on discovery of the irregularities in October 2005.

"This came about during a project to install a new billing system - ironically to improve customer service - and showed that figures reported to Ofwat, relating to response times to customers contacting the company's customer service centre, did not always match performance."

Les Dawson, Southern Water Chief Executive, said: "Today's announcement draws a line under a shameful period in the company's history when an area of the business was deceiving our customers and the regulator. The new management team has put procedures into place to ensure this will never happen again and once again we apologise to our customers.

"I can also assure them that the fine will be borne by the company's current shareholders even though neither they, nor our previous owners, knew of the deception that took place before the company's present management team was appointed."

Southern Water also said that it had agreed to reduce future customer bills, which had been higher than they should have been as a result of the misreporting.


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