More than 1,600 neighbours have reported each other for breaking hosepipe bans in the South East.
Hosepipes and sprinklers have been banned across the region
It follows water saving measures being imposed across the region in the face of severe drought, and appeals to customers to conserve water.
Southern Water, which serves two million customers, said 1,533 had reported people for breaking the ban which was imposed last summer.
South East Water, which supplies 1.5 million homes, has taken 100 calls.
A spokeswoman for Southern Water said: "We have every confidence that our customers will work with us to help conserve supplies, to ensure there is sufficient water in future for everyone's domestic needs such as drinking, washing and cooking.
"If, however, the restrictions are ignored, we have powers under Section 76 of the Water Industry Act 1991 to prosecute. Customers breaching the ban could face a fine of up to £1,000."
She added: "If it comes to our attention that a customer is using their hosepipe or sprinkler then in the first instance we will send the resident a letter reminding them of the drought situation.
"If the person continues to use water a representative from the company will visit the customer to explain the situation face-to-face, to try to reach an understanding."
For some parts of the UK, the past winter has been one of the driest since the winter of 1963/64.
In the Southern region, levels are down to 54% of capacity. After normal winter rains, levels would generally be much higher.
Kent and Sussex are the counties most at risk from drought in summer 2006, and here it would take a prolonged spell of above-average rainfall between now and April to avert water shortages.
According to the Met Office, there are equal chances of dry, normal or wet weather for the south of England over the next few months.