Water company given record £35.8m fine for 'lying' to industry watchdog

From The Daily Mail, 9th April 2008

A water company has been fined a record £35.8million for lying about its performance and customer service.

Severn Trent, one of the UK's biggest water suppliers, knowingly changed its customer service data to cover up its true performance.
The company admitted misreporting its water leakage levels in 2001 and 2002, which implied it was working to a much higher standard than was actually the case.
This data was then used by industry regulator Ofwat to determine how much the company should be allowed to raise its prices until 2010.
Ofwat concluded that, had the deceit not been discovered, householders would have been overcharged by £42million.

The watchdog considered the lies so shocking that it referred the case to the Serious Fraud Office for a criminal investigation.
Ofwat has insisted that the entire fine is paid for by the company and its shareholders and not passed on to the eight million customers.
Separately, Severn Trent faces a further fine and a criminal conviction for covering up its failures to tackle leaks from its pipes.

Regina Finn, Ofwat's chief executive, said: "This sends a clear message to the rest of the water sector. "Ofwat will protect consumers and companies must comply with their legal obligations or pay the price."

Tony Wray, Severn Trent's chief executive, said: "Those who were responsible for the customer relations mistakes are no longer with Severn Trent and we apologise to our customers for their failings."

Other water companies have also faced heavy fines in recent months for deliberately covering up customer service failures.
In December, Southern Water was fined £20.3million while Thames Water faces a £12.5million fine, both for providing misleading information to Ofwat.