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Last Updated: Wednesday, 19 July 2006, 14:29 GMT 15:29 UK
Ofwat planning Thames Water fine
Water dripping from tap
Thames Water has said it will improve its levels of service
UK water regulator Ofwat is planning to fine Thames Water for failing to meet adequate levels of customer service.

Ofwat has the power to fine Thames Water as much as 140m after the firm alerted it to the problems in January.

Ofwat said that it would allow accountancy firm Ernst and Young to complete an independent review before deciding upon the level of the fine.

Meanwhile, Southern Water is to be investigated by the Serious Fraud Office for misleading the regulator.

The company, which supplies a total of one million households in Kent, Sussex and Hampshire, has admitted providing Ofwat with incorrect data on its customer service standards - and said it was sluggish responding to complaints and enquiries.

Regret

The Thames Water announcement comes two weeks after the firm escaped a penalty for not fixing leaking pipes quickly enough.

"From the evidence we have seen it is clear that Thames Water has failed to meet performance standards," said Philip Fletcher, chairman of the Water Services Regulation Authority.

"The failures were within the company's control, and some customers have not received the standard of service to which they are entitled," he added. "As a result customers' interests have been damaged."

We have fully co-operated with this investigation so we can establish how these errors were made and make sure that they are not repeated in the future
Phil Scholes, Thames Water
"This is a clear warning to Thames Water that it must be focused on delivering the services that customers have paid for," Mr Fletcher said.

Wednesday's threat of a fine comes as Ofwat is conducting a wider examination of Thames Water's customer service performance.

In January, Thames Water told Ofwat that there were irregularities in the figures it used to show how it was meeting consumer standards, and as a result it was not reaching regulatory standards.

Ofwat explained that as well as facing a fine Thames Water may have to reimburse customers who were under-served.

"We have fully co-operated with this investigation so we can establish how these errors were made and make sure that they are not repeated in the future," said Phil Scholes, Customer Services Director at Thames Water.

"We regret the mistakes that have been made and apologise to customers who may have been affected," Mr Scholes added.

"Following the completion of the investigation, we will of course make good any compensation payments that should have been made," he said.


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