Water companies accused of using ‘scare tactics’ to get you to take out pipe insurance
WATER companies have been slammed by MoneySavingExpert for using "scare tactics" to trick people into taking out pipe insurance.
The consumer site says thousands of UK households have received letters seemingly from their water company urging them to take out plumbing and drainage insurance.
But the letters are actually from maintenance firm HomeServe, which operates on behalf of 13 suppliers.
Customers from Anglian Water, Cambridge Water and South East Water have all , which has been sent out over the past couple months.
The letters offer an insurance policy discounted from £10 a month to 75p per month for the first 12 months, and urge customers to respond by a specific date for the deal to be valid.
Crucially, the letters fail to make clear that the policy is optional and in some circumstances, could even be covered by your home insurance.
This isn’t the first time HomeServe’s practices have been called into question as the company was fined £30.6million back in 2014 for mis-selling insurance.
The company was also pulled up by consumer group Which? in 2012 for potentially selling unnecessary insurance to thousands of customers under the guise of their water provider’s branding.
Some customers have been so angry that they have even called out the water companies on Twitter.
Tagging Anglian Water in the post, one user said: “So why am I continually receiving marketing mail from my water supplier for insurance I already have, and therefore do not want or need, and why is this in partnership with a company that has been fined for miss-selling?”
Another has even accused the company of using “scare tactics” to try to convince people to sign up.
Responding to a separate complaint, the user said: “This exact same thing has happened to me! I’m on my sixth letter and the last one is nothing short of scare tactics!
"I was on my way to signing up when luckily I did some research and found some forums on @MoneySavingExp showing it for what it is."
'This smacks of hard-selling'
Gary Caffell, energy and utilities editor at MoneySavingExpert, said: "The way these letters were written, with the water firm's masthead and a request to urgently respond among other things, understandably left many householders confused and smacks of hard selling.
"Remember, if you have received one or something very similar from your water company and don't want the insurance, just bin the letter.
"And if you have already signed up but have now changed your mind, you can cancel."
The Sun contacted financial regulator, the Financial Conduct Authority, about the letters and an FCA spokesman said: "Firms must ensure that their promotions are clear, fair and not misleading. They also need to ensure that these marketing communications are always clearly identifiable as such. We will be speaking with the firm about this matter."
Speaking to The Sun, HomeServe said: "We have recently undergone some localised marketing activity with two of our water partners, offering potential Customers a limited time, completely optional, introductory water supply pipe policy.
"This letter is the beginning of an application process which is then followed by fully regulated Customer on-boarding activity and a 28 day cooling off period. Any HomeServe Customers with any policy can also cancel at any time without penalty.
";This activity highlights that issues with water supply pipe are the responsibility of the homeowner themselves, which our existing Customers tell us is not often clear, and that repairs can be expensive. The average cost of a repair is £467 and on average we complete around 195 WSP repairs a month in one partner area alone.
“We constantly adapt and tailor all our marketing and we're grateful for the feedback and the opportunity to reassure any concerns Customers might have about any of our activity.”
How to save money on your water bills
HERE'S how to save cash on your water bills:
- If you’re struggling to pay your bill, discuss it with your water company.
- Check what water and sewerage services you receive and claim a rebate for anything you're not getting that you're paying for.
- Check that you are paying the correct tariff. If you aren't already on a meter, check if you can reduce your bill by installing one - although do check if there are costs involved first.
- Read your meter regularly.
- Look for ways to reduce your water usage, such as by taking showers instead of baths and turning off the taps while you clean your teeth.
Meanwhile, an Anglian Water spokesman said: "Homeserve provides repairs and insurance cover for Anglian Water Direct on behalf of Anglian Water.
"We will review the content of the letters with Homeserve, following customer concerns. We appreciate that the products do not appeal to all of our customers and they can opt out of receiving these marketing materials by visiting the and selecting “Opt out of HomeServe marketing.”
Steve George, customer services director, South East Water, said: “We take our responsibility to all of our customers extremely seriously.
“We’ve partnered with HomeServe for a number of years as it offers a comprehensive service which covers the cost of repair on customer-owned pipework in the event of a burst or leak.
“The insurance is not obligatory, but recommended by us as the costs associated with such leaks and bursts on private pipe work can sometimes be very significant.
“We review HomeServe’s marketing materials regularly and are talking to it about how its communications can be improved, particularly on how people can opt out of receiving these letters.”
Lucy Byrnes, policy manager at trade body the Consumer Council for Water, said: “We’ll be investigating these letters and are especially concerned given that HomeServe previously assured us it would tackle the serious concerns we raised over the clarity and wording of some of its communication with households.
“Consumers should not feel pressured into taking out any sort of optional insurance and HomeServe, along with the water companies that put their names to these letters, have a shared responsibility to make sure that any marketing is clear and not potentially misleading.”
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