United Utilities Accused of Taking Payments Unlawfully

United Utilities Accused of Taking Payments Unlawfully

Reports are surfacing that United Utilities, a water company serving the North West of England, has been making monthly deductions from customers' benefits through the Department for Work and Pensions (DWP), even when their accounts are in credit.

In one verified case, WireNews confirmed that United Utilities took more than £400 from a customer who had no outstanding balance. The customer was forced to reach out to the Consumer Council for Water (CCW), an organisation that acts as an independent voice for water consumers, in England & Wales.

A representative for United Utilities, identifying herself only as "Amy," stated that the company would not offer any compensation to the customer for more than 10 months of deductions—amounting to nearly £50 per month—despite the account being in credit throughout the entire period and the hardship these deductions caused.

The CCW wrote to United Utilities, a document which WireNews has reviewed and yet Amy denied that the CCW had ever contacted United Utilities.

The DWP, for its part, told the consumer that it was unable to stop the payments because United Utilities had an obligation to ensure there was a deficit balance and was entitled to collect the money under those circumstances. However, documents reviewed by WireNews show that the customer repeatedly informed both DWP and United Utilities that the account had been in credit for over 10 months. Eventually, the DWP halted the deductions, but when WireNews spoke to United Utilities, Amy claimed the payments were stopped by the company. They were not and that was an untrue statement.

Still, despite repeated requests, United Utilities has not returned the customer's money, as of this writing. Because United Utilities took money from a customer’s DWP benefits when it was not entitled to do so, there could be several legal and regulatory violations:

1. Unfair Trading Practices (Consumer Protection Laws)

Under the Consumer Rights Act 2015, businesses must act fairly and cannot impose charges or take payments that a customer does not legally owe.

The Consumer Protection from Unfair Trading Regulations 2008 prohibit companies from engaging in misleading or aggressive commercial practices.

2. Theft or Unlawful Enrichment (Criminal Offence)

If the company knowingly took money from a customer’s DWP benefits without a legal right, it could amount to theft under the Theft Act 1968:

Section 1 defines theft as "dishonestly appropriating property belonging to another with the intention of permanently depriving them of it."

Even if United Utilities later refunded the money, it does not necessarily erase the act of unlawful appropriation.

3. Breach of Water Industry Regulations

The Water Industry Act 1991 gives Ofwat (the regulator for water services in England and Wales) the power to investigate unfair or improper billing practices.

CCW (Consumer Council for Water) can also intervene if customers have been wrongly charged or treated unfairly.

4. Data Protection Breach (If Done Without Consent)

If United Utilities misused customer data to request deductions from the DWP, it could breach the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018.

5. Unfair Deduction from Benefits (DWP Rules)

The Social Security Administration Act 1992 allows deductions from benefits for essential services, but only when legally justified.

If DWP processed an incorrect deduction based on misleading information from United Utilities, it could be challenged as an unlawful deduction.

Because United Utilities has failed to refund the improperly taken money, several legal and regulatory mechanisms could impose financial consequences:

1. Interest on Unlawful Charges (Contract and Consumer Law)

Under UK contract law, if a company unlawfully takes money, it may be required to repay the full amount plus interest at a statutory rate.

The County Courts Act 1984 allows courts to award statutory interest on unpaid sums at 8% per year (or the Bank of England base rate + 8% for business claims). In this case, The customer would be entitled to approximately £33.33 in interest at an 8% annual rate for the 10-month period.

2. Compensation for Unfair Charges (Consumer Rights)

The Consumer Rights Act 2015 allows customers to claim compensation for financial losses or distress caused by unfair charges.

If CCW or Ofwat finds that United Utilities acted improperly, it may be ordered to compensate affected customers.

3. Regulatory Penalties from Ofwat

Ofwat can fine water companies up to 10% of their annual turnover for regulatory breaches (e.g., unfair billing practices).

If United Utilities systematically took payments it was not entitled to, Ofwat could investigate and impose fines.

4. Ombudsman Compensation (If DWP Involvement)

The Parliamentary and Health Service Ombudsman can award compensation if the DWP failed to act when informed of wrongful deductions.

The Ombudsman may also recommend additional payments for distress and inconvenience.

5. Small Claims Court Action

If United Utilities refuses to refund, the customer can file a small claims case demanding:

• Full repayment of the wrongful deduction

• Interest (8% per year) from the date of the deduction

• Compensation for financial distress caused by the missing funds

If you have had similar experiences with United Utilities contact WireNews.

In a case, such as the one described above, reasonable compensation would depend on various factors, including financial hardship, stress, and inconvenience caused. Here’s a breakdown of potential compensation beyond the £33.33 interest:

1. Financial Distress Compensation (£100 - £500)

If the customer faced financial difficulties due to the unlawful deductions (e.g., struggling to pay rent, food, or other essentials), compensation in the range of £100 - £500 could be appropriate.

2. Emotional Distress & Inconvenience (£100 - £300)

If the customer repeatedly contacted United Utilities and DWP to resolve the issue but was ignored or delayed, they could claim for stress, frustration, and time wasted.

The Ombudsman often awards between £100 - £300 for such cases.

3. Cost of Pursuing the Case (£50 - £200)

If the customer incurred costs in making complaints (e.g., postage, phone calls, legal advice), reimbursement of £50 - £200 may be justified.

4. Regulatory or Punitive Compensation (Up to £1,000+)

If Ofwat or the Ombudsman determines that United Utilities acted unfairly or abusively, they may recommend a higher payout of up to £1,000 or more, particularly if multiple customers were affected.

Estimated Total Compensation: £250 - £1,500+

A fair compensation claim would likely fall between £250 - £1,500, depending on the severity of the impact.

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