I’ve assisted many customers over the years when faced with a similar problem. It is a matter of narrowing down the possibilities.
First, you need to read your meter. In many cases, you will have four or five numbers in black and the next two numbers will be in red. For example, if you see 123456, it would be interpreted as 1234.56 and the final two numbers will be dropped in the billing process so they are billing you for whole units of water, not partial. Units typically are CCF, meaning 100 cubic feet.
If the reading you read today is higher than the last reading of your bill, then their read is correct. If your read is lower, they had a misread and should correct your bill.
Assuming the read is correct, then water went through your meter at some point. You say you shut everything off and the meter stopped. This was a good step for your to take. I would take it a step further and not run any water in your house (to your knowledge) for the whole night. Look at your meter again first thing in the morning and the read should be exactly the same as the night before. If it has changed (gone higher), you have a leak, probably a slow one.
If you find you have a leak, you then have to determine if it is inside your house or outside. To do this, you have to find the shutoff valve to your house. Turn it off. If you continue to have water flow through your meter, the leak is outside (sprinkler systems are prime suspects). Look for particularly lush, green patches in your yard. If the water does not flow through the meter when your shutoff valve is off, the leak is inside the house.
Inside the house, toilets are usually the culprit. Make sure your check ALL the toilets, even the remote basement toilet that people tend to forget. To do a thorough check of toilets, do the dye test. You can get some food coloring and put a few drops in the back tank. Wait about 30 seconds. If any of the colored water seeps forward into the bowl, you have a leak. If not, the toilet is fine.
If everything checks out fine, then it is likely an unusual circumstance such as a toilet, for whatever reason, was running because the flapper didn’t drop. If this is the case, a toilet can lose 250+ gallons per hour. That means in about 3 hours, you would use an entire unit of water!
It is possible that someone decided to hook up to your outside faucet and help themselves. I’ve known of it to occur, and it was regarded as theft.
There have also been times that the meter malfunctioned, but this does not occur very often. When all other possibilities have been eliminated, the meter can be tested for accuracy. This may be free of charge or you may be faced with a gamble. . .if the meter is malfunctioning, the fee is waived; if the meter tests accurate, you may be responsible for the fee.
Regardless what is going on, work with your water utility personnel. They are a wealth of information and your account can be noted and tracked. If this is unusual consumption for you, it is apparent to them as well and they will want to help. If you are not satisfied, keep moving up the chain of command. . .supervisor, manager, director, and ultimately the hearing officer.
The worst thing you can do is not involve them and not pay. Normal credit action would occur, and while you would not be shufoff immediately, there would be nothing to deter their normal delinquency process. If you work with them, a payment arrangement can be made so you pay what you normally would now, and delay the increased portion pending consumption investigation.
Good luck. I hope that I’ve been able to help. I’ll check in periodically to see how it’s going.