Watercare apologises after deducting $6m from 44,000 customer accounts in mass billing error

Watercare has apologised after a billing error resulted in more than $6m being prematurely deducted from nearly 44,000 customer accounts.

Watercare says it is “deeply sorry” after deducting more than $6 million from nearly 44,000 customer accounts this week in a mass billing error.

A consumer watchdog says it’s disappointed by the mistake and expects Watercare to show leniency to any customers now forced to pay manually.

“This issue is ultimately Watercare’s fault.”

One of the affected customers received an email on Monday informing him that due to a “systems error”, his direct payment had been processed that day, “earlier than your scheduled payment date”.

“We sincerely apologise for this error and for any inconvenience it may have caused,” the email said.

“Please be assured that this payment has been successfully applied to your account and will not be deducted again on the original due date.”

Watercare noted that if the early payment had caused the customer “financial hardship” and he would like it reversed, he should contact the council-controlled organisation with details of his account and property address.

“Please note that if the payment is reversed, you will need to make a manual payment on your original due date to ensure your account remains up to date.”

The man told the Herald he was unhappy with the mistake and wondered how much interest Watercare stood to earn on the millions of dollars it had wrongly deducted from unsuspecting customers.

Watercare’s chief financial officer Angela Neeson confirmed the error occurred during a billing system upgrade, which resulted in direct debit and credit card payments being processed before their due date.

“Around 43,835 customer accounts were affected, with payments totalling approximately $6.14 million.

“We’re deeply sorry for this error and the inconvenience it has caused. We are working with the system provider to restore normal service as quickly as possible.

“In the meantime, we have put manual controls in place to ensure no further payments are processed prematurely.”

Neeson said the mistake occurred on Monday. Affected customers were contacted the same day.

“Customers have been offered the option of having the payment reversed as we know an unexpected payment can create financial hardship for some customers.

“Any requested refunds are being processed immediately so the money is returned the same day or by the next working day.”

Customers who chose to have the payment reversed would need to manually pay their bill on the due date.

“We apologise again to all affected customers for this system error.”

Consumer NZ campaigns manager Jessica Walker said it was disappointing that a “widespread error” had led to tens of thousands of customers having money deducted from their accounts unexpectedly.

“Under the Consumer Guarantees Act (CGA), businesses have an obligation to provide their services with reasonable care and skill. In this instance, we think Watercare has failed to do that.

“We know that mistakes happen and are pleased to see that Watercare proactively contacted its impacted customers quickly. We urge any Watercare customers who are caught up in this issue and at risk of hardship to contact Watercare as soon as possible so they can receive a refund immediately.”

Walker said that given the circumstances, she expected Watercare to show leniency with any customer whose manual payment was delayed.

“After all, this issue is ultimately Watercare’s fault.”

Consumer NZ also believed customers who incurred additional costs or bank fees as a result of the failure were entitled to claim this back from Watercare under the CGA.

Lane Nichols is Auckland Desk Editor and a senior journalist for the New Zealand Herald with more than 20 years’ experience in the industry.

Sign up to The Daily H, a free newsletter curated by our editors and delivered straight to your inbox every weekday.