Debt collection tactics used by UK water firms have come under scrutiny as it has come to light that they use their own debt collection letters appearing to be from external debt agencies to put pressure on debtors. Similar practices have been highlighted recently with payday lenders, banks and energy firms using these tactics to get customers to pay up.

The water companies have commented saying that these letters are only used as a last resort, as part of their business is to manage the bad debts outstanding. ‘You and Yours’ reported on their Radio 4 show that twelve of the UK’s main water suppliers have used these practices, with five confirming that they would consider carrying on with this process.

Previously a large collection agency name would be included at the top of the letter and it would be difficult to find a reference to the original company name. Thames Water claims that its collection letters are “open and transparent”.

The layout included on these “debt collection” letters has been deemed unacceptable by energy regulator Ofgem, which has been reviewing comparable practices by energy suppliers. Ofwat the water watchdog has addressed companies within its sector stating the same principles will apply to them.

Yorkshire Water has previously defended the practice but has “temporarily changed” its approach. Yorkshire Water says "Any customer who receives a letter from Rockford would already have received three letters from Yorkshire Water urging them to get in touch, as well as a text”.

Northumbrian Water, Welsh Water and Affinity Water stopped sending letters of this nature earlier this year. Thames Water, the largest domestic water supplier in the UK, has confirmed that they will continue to proceed with the criticised practice. The letters they use state in three different places that County Wide Collection is part of the Thames Water Group. Before these criticisms it was hard to find any links back to the original company.

Ofwat comments that customers should not feel scared or misled when being addressed by companies they owe money to.

Gillian Guy of Citizens Advice says “We're not saying don't pursue debt…. Clearly companies are entitled to do that, but we are saying that they really ought to do that honestly and with some sensitivity”.