Severn Trent Hit With £35.8m Fine

UK water company regulator Ofwat has fined water company Severn Trent Water £35.8m for providing false information to its customers.

Ofwat has fined Severn Trent Water three percent of its turnover after it found the company had backdated letters to its customers and "deliberately misreported some of its customer service data" to hide true performance figures.

The company's actions resulted in customers paying higher bills than necessary with some missing out on payments they were entitled to because performance fell below prescribed standards, says the regulator.

"Severn Trent Water's behaviour was unacceptable. The size of the proposed fine reflects how seriously Ofwat takes the deliberate misreporting of information," says Ofwat Chief Executive Regina Finn.

"This sends a clear message to the company and to the rest of the water sector ... Any further attempts to deliberately mislead Ofwat could lead to even bigger fines in the future."

In response, Severn Trent says it immediately alerted misreporting and poor service to the regulator, and has taken steps to "implement proper controls and an ethical working culture with the highest standards".

"Without waiting for Ofwat's conclusions we are lowering bills for customers by £10.6m, around £2.40 per household, to ensure we have not profited in any way," says Severn Trent Chief Executive Tony Wray.

Severn Trent Water is one of the largest water companies operating in England and Wales, representing nearly 15 percent of total industry turnover.

By Ozge Ibrahim