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Water firms in U-turn over ‘scare tactics’ letters

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
02/07/2019

Water firms have been forced to review their communications after a customer backlash.

Tens of thousands of households have received letters that appear to be from their water company but are actually from maintenance firm HomeServe.

The letters are selling insurance contracts to cover pipes, plumbing and drainage, but consumer website MoneySavingExpert.com says the letters use ‘scare tactics’ to sell the cover.

The letters use headed paper with the water company’s logo and urge consumers to respond quickly. But the communications fail to make it clear that the Homeserve policy is optional and households could already be covered for some elements under a home insurance policy.

The insurance costs 75p a month for the first year – but automatically renews in the second year with the price jumping to £10 a month.

Gary Caffell, energy and utilities editor at MoneySavingExpert.com, 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.

“It’s only right that the firms concerned have listened to the negative feedback and have told us they will think more carefully in future about the content of their mail-outs.

“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 should be able to cancel.”

MoneySavingExpert contacted the water companies concerned and as a result several, including Anglian Water, Cambridge Water and South East Water, agreed to review Homeserve’s marketing material bearing the water company’s logo.

HomeServe was fined £30.6m by the Financial Conduct Authority (FCA) in 2014 for mis-selling insurance policies, the largest ever retail fine for mis-selling.