Thames Water has had to pay customers £60,000 in compensation after it discovered an unmanned inbox containing thousands of emailed complaints and comments.
It was one of a number of water companies identified by Ofwat as not meeting industry performance standards due to email-related issues.
According to Ofwat's latest report, 'Service and delivery - performance of water companies in England and Wales 2009-10', Thames Water reported to the regulator that it had discovered an email inbox containing nearly 4,000 unread customer emails. The emails dated as far back as 31 March 2003.
"We have paid out a total of £60,000 to compensate the 1,800 people we let down and we are currently investing a further £1.2 million to improve our service further," a spokesperson for Thames water said.
The company paid out £40 to 1,200 customers and £20 to 600 customers.
The nature of the email problem was that messages were sent to an incorrect email address, starting with "customerfeedback", instead of "customer.feedback". Rather than bouncing back to customers, the emails sent to the wrong address ended up in an inbox "we were not aware of", Thames Water said.
The problem was only discovered when a member of staff sent an email to the wrong address and did not receive a reply, which led to a full investigation and the discovery of the inbox.
However, the water company said that the number of unread emails was small compared with the 4,000 contacts it gets from customers each day.
Ofwat said that Thames Water had proposed a package of measures to improve its service, including providing enhanced online facilities and enhanced training for frontline customer service staff.
Meanwhile, Severn Trent Water was another company that was highlighted in the Ofwat report for its email-related failings.
In March 2010, Severn Trent reported to Ofwat that it had identified a problem with is web-based leak reporting system, Leakline. This meant that 6,700 leak reports were not relayed to call centres and acted upon over a period of three years.
Severn Trent said that the Leakline email is one of 48 web-based routes, which includes Twitter, through which customers can contact the water company. It receives around six contacts through Leakline each day.
"There were no IT infrastructure failures involved in the customer leak reports affected, rather a fault in process which meant the contacts were not identified by the operational team, which should have received them," the company said in a statement.
As well as identifying and making appropriate redress to affected customers, Severn Trent said it implemented improvements to the website and new procedures to avoid a similar issue occurring again.
The measures included the implementation of three layers of quality assurance into web-based contacts, comprising system-generated reports running weekly to ensure that the technology is working correctly, regular runs of test emails to ensure that emails are reaching their destination and acted upon, and an end-to-end review of all web-based contacts will be completed quarterly.
Ofwat also said that Severn Trent was considering what redress it might offer to customers.
Like Thames Water, Veolia Water East was forced to pay out compensation, a total £1,183, after it discovered failures relating to its new customer online form.The 'new customer moving into the area' online form was designed in-house, and was on a website hosted by a third party. Out of 204 customers who submitted their details on the form, forms from 88 people were not generated into emails that should have been forwarded on to customer service staff.
The company discovered the issue when it received an email from a customer who said he had completed an online form, but wanted more information.
"We checked our email box to deal with his online form but no email had been generated," Veolia Water East said.
After investigating, the company realised that the third-party website provider had not enabled the new customer moving into the area form. The form was launched in April 2009, and Veolia reported the problem to Ofwat in August 2010.
In addition, South West Water has been required to improve its systems and training after weaknesses in these areas resulted in the company misreporting written email complaints and appointment data.
The company had failed to check its mailboxes under one consistent process, which meant that it reported inaccurate figures about email contact to Ofwat during 2007 and 2008.
"While the necessary technology was in place, we identified that our processes needed to be more robust," South West said, adding that the number of customers affected was "very small".