PORTLAND, Oregon (COIN) — The Portland Water Bureau has been advised to stop charging fees for returned payments after an audit found it had overbilled numerous customers.
The The Ombudsman’s Office revealed It launched an investigation into PWB’s practices following a December 2023 customer complaint. The resident claimed he was forced to pay the repayment fees “due to circumstances beyond his control” and the office refused to issue a refund.
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During the subsequent investigation, city auditors found that PWB had increased its fee for refunds from $25 to $35 in July 2008—even though the agency was not allowed to impose the increased fee under Oregon law until January 2012.
The Ombudsman concluded that the office had been overpaid over that three-year period, basing his findings on records showing that 1,145 payments were repaid last year.
City officials said banks charge PWB an average of $16 per bounced payment and the office spends about $82.25 to recover each loss. Auditors called this an “inefficient use of resources and loss to taxpayers.”
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According to the report, the fees also exacerbate inequality within certain population groups.
“The Water Authority’s 2021-2025 Equality Plan states that the Authority places value on anti-racism and affordability,” said Deputy Ombudsman Andy Stevens wrote“The disproportionate burden of insufficient funds fees on certain socioeconomic groups may not be consistent with the Water Bureau’s equity values.”
Stevens also argued that these fees were not necessarily an effective deterrent for customers who had not made payments due to financial difficulties.
The auditors advised the office to tell customers who had previously overpaid that they are now entitled to a refund. The agency was also asked to stop charging fees for repayments in the current financial year and instead resort to overdraft fees or late payment fees, which are charged seven or 14 days later respectively.
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In responsePWB Interim Director Edward Campbell said the bureau is working to provide bill credits to residents who overpaid between July 2008 and December 2011.
He also said that as part of the current fee, policy and procedural fairness review process, officials are considering eliminating fees for refunds.
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