The Ombudsman's final decision
Summary: Mrs X complained the Council failed to properly communicate with her father in-law, Mr Y, in relation to his housing benefits debt. The Council was at fault. It did not inform Mr Y when he had cleared his debt which resulted in him overpaying the debt he owed. This caused Mr Y significant distress. The Council has already put measures in place to prevent a recurrence of fault. However, the Council has agreed it will apologise to Mr Y and pay him £300 to acknowledge the distress the matter caused him.
The complaint
Mrs X complained the Council failed to properly communicate with her father in-law, Mr Y, in relation to a housing benefits debt he was paying off. She says this resulted in Mr Y overpaying his debt. Mrs X says this has caused Mr Y significant distress. She wants the Council to apologise to Mr Y and provide him with a payment to acknowledge the distress caused.
The Ombudsman’s role and powers
We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended) If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
I spoke with Mrs X.
I considered the information Mrs X provided.
I considered the information the Council provided.
Mrs X and the Council had the opportunity to comment on the draft version of this decision. I considered their comments before making a final decision.
What I found
What happened In 2003, the Council found it had overpaid Mr Y a housing benefit payment. As a result, Mr Y owed the Council over £10,000.00. The Council agreed with Mr Y that he would make monthly payments to the Council to pay off his debt. Mr Y set up a standing order with his bank in 2003, to make a payment of £100 to the Council each month.
In 2021, Mrs X found Mr Y was still making payments to the Council in relation to his debt and consequently, he had overpaid his debt significantly by £8,620.77.
Following this, Mrs X complained to the Council. She said Mr Y had paid off his debt in 2014 and so wanted to know why the Council had continued to take payments from his account for an additional seven years. She wanted to know why the Council had not informed Mr Y his debt had been cleared. Mrs X said the Council had only written to Mr Y once in June 2012 in relation to his debt and what was outstanding. Mrs X added Mr Y relied on his pension and benefits and £100 a month was a considerable amount of money for Mr Y to be without. She wanted the Council to refund Mr Y what he had overpaid and to provide him with a financial remedy for the anxiety and distress the matter caused him.
The Council responded to Mrs X. It arranged for an immediate refund of £8,620.77 to be made to Mr Y. It said as Mr Y had arranged the standing order with his bank, it was his responsibility to cancel it. The Council said it did not have authorisation to cancel a person’s standing order. The Council did not agree to provide Mr Y with a financial remedy for the distress caused.
Mrs X remained unhappy and complained to us.
As part of my investigation, I asked the Council: if it notified people when their debt had been cleared.
if it notified Mr Y when he had cleared his debt.
The Council said it previously did not notify people when their debt had been cleared due to the amount of accounts it has to manage. However, since October 2021 and Mrs X’s complaint, the Council has revised its process. It now checks credit balances against any outstanding debt on a monthly basis. It also contacts people and provides them with updates on their accounts.
The Council said it did not notify Mr Y when his debt had been cleared however, it recognised it should have done so.
Findings
When Mr Y had cleared his debt in 2014, the Council did not provide him with an update of his account. Due to this, Mr Y continued to make monthly payments to the Council over an extended amount of time. The Council should have informed Mr Y his debt had been cleared and advised him to cancel his standing order. The Council was at fault as it did not properly communicate with Mr Y. Since then, the Council has put measures in place to prevent a recurrence of fault. I am satisfied with the Council’s actions.
However, Mr Y had paid £100 over a seven-year period when he did not need to. This caused Mr Y unnecessary financial hardship and significant distress.
Agreed action
Within one month of the final decision, the Council has agreed it will: apologise to Mr Y for failing to notify him once the debt was cleared in 2014.
make a symbolic payment of £300 to acknowledge the distress the matter caused him.
Investigator's decision on behalf of the Ombudsman