August 28, 2023 – City of Portland: Ombudsman finds Water Bureau overcharged for past returned payment fees, recommends removing such fees going forward
After a complaint, the Ombudsman investigated the Water Bureau’s practice of charging fees for returned payments. The Ombudsman recommended the Bureau notify customers impacted by a past overcharge that they are entitled to a refund, and that the Bureau remove returned payment fees going forward.
Executive Summary
In December 2023, the Ombudsman’s Office was contacted by a complainant who raised concerns about the equity and fairness of returned payment fees charged by the Portland Water Bureau, after the complainant incurred the fee due to circumstances beyond their control and was denied a refund.
We investigated this complaint and identified several issues of concern. Over a previous three-year period, the Water Bureau charged customers a higher returned payment fee than allowed under state law. Returned payment fees have inequitable impacts on certain socioeconomic groups, raising questions about alignment with the Water Bureau’s equity goals. The fees may be ineffective in deterring future returned payments because they are likely to be caused by financial hardship or other circumstances beyond customer control. Additionally, the Bureau’s total losses for returned payments are almost three times higher than the amount it recovers, which is an inefficient use of resources and loss for ratepayers.
To address these concerns, we recommend the Water Bureau notify customers who may have been impacted by the past overcharge that they are entitled to a refund and remove returned payment fees starting Fiscal Year (FY) 2024-25.
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