The days of free water service for thousands of phantom Birmingham Water Works Board customers are nearly over, following a recent crackdown from the utility.

At its peak there were 5,000 customers using water without paying for it, amounting to about $2 million in lost revenue.

The number of phantom customers has now fallen to 200 to 300 customers, General Manager Mac Underwood told AL.com.

“For the most part the biggest percentage of them agreed to the payment plan, understood they had been using the water over the past months, and agreed to pay the past due balance,” Underwood said. “In the end, we convinced them that they had been using the water and they were due to pay for the water.”

Officials in August began tracking free water users and telling them to either pay up or get shut off.

Underwood said most customers we placed on 12-month plans to pay for their previous free water service.

The water works identified the free customers by cross-referencing system-wide usage reports to actual bills sent out. Usage had exceeded the number of active accounts within the system.

There were two types of phantom customers. Some were users who were previously disconnected for non-payment and had resumed service, but were never reentered into the water works billing system.

Other free customers were households that were officially shut off from the system but had illegally reconnected themselves.

Free water service mostly went back to 2024, but some dated as far as 2021.

“You’ve got consumption at the meter but there’s no bill going to that account,” Underwood explained.

The Birmingham Water Works serves about 770,000 customers in Jefferson, Shelby, St. Clair, Blount, and Walker counties.

Internal problems at the utility, including a lack of regular meter reading and coordinating with the billing system allowed the problem to persist, officials have said.

Underwood said the utility has since assigned an employee to monitor water use and confirm that customers are on the roll and are paying.

“They are working that report and those codes every day,” he said.