29. We have considered the complaint about each organisation separately. When looking at whether there have been failings in the service provided, we first determine what should have happened in the circumstances. We then look at what did happen and consider whether that fell so far short of what should have happened that it amounted to maladministration.
The DWP
30. Mr R wanted the DWP to tell him where the payment had gone. He says it took too long to give him the information he needed to track down the payment.
31. The DWP’s Missing Payments Guide explains if a customer reports non-receipt of direct payment, the payment may not have been credited to the correct bank/building society account: ‘If the bank/building society has diverted the payment to a different account belonging to the same customer then [the] customer needs to take this up with their bank/building society. It is important to check that any change to account details provided by the customer has been actioned and that this took place before the next payment was issued.’
32. It goes on to say, ‘if the customer has made an error and provided incorrect bank details, inform the customer that they need to resolve this with their bank’. The guidance instructs staff to ‘check whether the correct account details have been used by checking details on system against what the customer has supplied OR by confirming with the customer that they have supplied the correct account details’ if the bank account details are incorrect.
33. In mid-July, Mr R asked for the details of the bank account the payment had gone to, but the DWP refused to provide that over the phone. Mr R is unhappy about this. The DWP’s guidance for staff says information that should never be disclosed includes bank details. As such, we consider it appropriate that the DWP did not provide this information to Mr R during his telephone call.
34. The DWP issued QB42 forms to Mrs R over the next couple of weeks. These forms did have the bank account details on, both the initial incorrect account and the one the money was redirected to.
35. The DWP should have processed the QB42 form it received in August 2016. ICE noted the DWP received the completed QB42 form on 5 August 2016 but took no action. It also did not explain that the two QB42 forms Mr R received contained different bank account details because the payment had been redirected from a closed account to an open one.
36. Mr R first contacted the DWP to request the BACS report on 5 September 2016 but it did not provide this until January 2017. It is clear there was a delay in the DWP providing the BACS report to Mr R. ICE has acknowledged this.
37. The DWP told us it does not have any guidance on what to do if someone requests a BACS report. It said its ‘Missing Payments’ guidance does not state that a bank would require a BACS reference to locate a payment. The BACS website states that the account number and sort code should be sufficient.
38. Our Principles of Good Administration say organisations should be customer focussed. This means organisations should behave helpfully, deal with people promptly and within reasonable timescales. They should bear in mind people’s individual needs and respond flexibly to the circumstances of the case.
39. The bank’s correspondence with Mr R is clear in that it needed the BACS report to trace the payment. It is not clear when the DWP should have provided the BACS report but the way it handled Mr R’s requests was not in line with our Principles. This is a failing in its approach. We have considered what impact this had.
40. In the absence of any specific guidance, we have conservatively estimated that Mr R would have received the BACS report by late September. By then, the payment would have been in the wrong account for two months. We recognise Mr and Mrs R would have had less cause for concern about the impact of the DWP’s actions if it had provided the BACS report sooner.
41. Based on the evidence we have seen, we cannot say with certainty whether Mrs R would have recovered the payment sooner. On the balance of probabilities, if the DWP had provided the BACS report four months earlier, it is likely Mrs R would have recovered the payment four months sooner than she did. Our view is based on information we obtained from the second bank, where the new account was located.
42. The unintended recipient had spoken to the bank in March 2017, two months after the DWP provided the BACS report, and started making monthly repayments to Mrs R in December 2017. The payments continued over the next two years. The DWP would not have been aware of this at the time. Mr R had asked the bank, but it said it did not know what these payments were. Mr and Mrs R had no reason to suspect they were linked to the State Pension.
43. We considered whether the DWP took appropriate action to put things right. The DWP can make special payments to compensate for actual financial loss and inconvenience or distress caused by its maladministration. The DWP’s principles say individuals should not be disadvantaged as a result of maladministration. They also say injustice and hardship resulting from maladministration should be addressed on a case-by-case basis.
44. There are three special payment categories where individuals can be awarded financial compensation in response to the DWP’s maladministration. A special payment may be considered under the category of a consolatory payment where the customer (or a third party) has suffered injustice or hardship arising from maladministration. Consolatory payments will usually range from £25 to £500.
45. The DWP’s Financial Redress guidance says special payment officers should consider whether the customer’s actions contributed to, or prolonged, the injustice or hardship. Special payment decisions should bear in mind the time taken to resolve a complaint, and the time and trouble the individual went to in order to obtain appropriate redress.
46. Our Principles of Good Complaint Handling say organisations should consider all the relevant factors of the case when offering remedies. They should also take account of any injustice or hardship that results from pursuing the complaint, as well as from the original dispute.
47. The DWP told Mrs R it could not make a special payment in relation to the lost payment, but it paid £100 to make up for the delay in providing the BACS information, and failings in its customer service. When we attempted to resolve the complaint, it told us it was not willing to increase the financial remedy it offered to Mr and Mrs R.
48. It told us the complainants accept they provided incorrect bank details and it had not recovered the payment from the account holder who inappropriately received the payment. It considered the special payment of £100 to be appropriate in the circumstances.
49. Mr R told us that not knowing where the money had gone made him and his wife feel powerless. He said the initial mistake was his, but it should not have been so hard to correct. He feels if the DWP had told his wife it was going to pay her State Pension into a new account, she would have been able to confirm it had the correct account details.
50. Mr R feels the DWP asked him ‘strange questions about the [other bank]’ instead and delayed giving him information. He says this resulted in months of frustration for him and his wife.
51. Internal documentation shows that initially the DWP accepted it knew the payment had been redirected: ‘but what we did not know is that both the originally [incorrect account] supplied by Mr R and this new account were not Mrs R’s accounts. At the end of the day all of this issue is the result of Mr R giving the Department an incorrect bank account number when dealing with his wife’s State Pension claim.’
52. When the DWP considered this further, it recognised it ‘should have managed the customer’s enquiries about the matter in a more timely and professional manner’. The DWP also noted Mr and Mrs R had ‘suffered gross inconvenience in the pursuit of a replacement payment.’
53. In its response to the complaint, the DWP recognised Mr and Mrs R, ‘spent an unacceptable amount of time trying to obtain BACS information which was critical to tracing the missing payment’. It said it had ‘provided comprehensive correspondence detailing how many times you asked for our help and the number of errors, including missed call backs, letters being left unanswered and general customer service failings before you escalated the matter to the Director General’s office’.
54. Overall, the DWP sufficiently considered most of its actions, and the impact of them, when deciding on an appropriate consolatory payment. We recognise ICE identified extra failings in the DWP’s process. ICE noted that had Mrs R been notified, the error in the bank details may have come to light much earlier than it did.
55. We now know the DWP did attempt to notify Mrs R but unfortunately, she did not receive its letter. There is no indication this was due to a failing by the DWP. Mrs R knew something had gone wrong when she did not receive her State Pension payment. Mr R contacted the DWP shortly after it had added the new (and still incorrect) account details to Mrs R’s account.
56. We understand the DWP’s notification letter would not have included the full account number and sort code. This meant Mr R would still have had to make further enquiries to find out where the State Pension payment had gone. Therefore, having the notification letter may not have significantly changed Mr and Mrs R’s experience.
57. We recognise that Mr and Mrs R are keen for the DWP to learn from their experience. We considered our Principles of Good Complaint Handling to decide whether the DWP has done enough to put things right. Our Principles say public bodies should learn from complaints and use feedback to improve their services.
58. The DWP accepts it should have provided the BACS report sooner than it did. It has already apologised for this and reflected that its delay ‘meant that the recovery of the missing money has been delayed and complicated’. This is what we would have expected it to do to put things right for Mr and Mrs R.
59. The DWP told us it had not encountered this situation before. Additionally, as part of changes to its payment processes in November 2021, it implemented a tool which highlights if bank account details do not match the name on the account. The DWP told us this will allow staff to query the details with the customer before a payment is issued.
60. Had this been in place when Mr R first contacted the DWP, it is very likely Mrs R’s State Pension would have paid to the right account from the outset. With this in mind, we are not proposing to make recommendations to the DWP because we hope the change it has made will reassure Mr and Mrs R that other service users will have a better experience.
ICE’s consideration and recommendations
61. Our Principles of Good Complaint Handling say organisations should investigate complaints thoroughly and fairly, basing their decisions on the available facts and evidence. They should take account of any injustice or hardship that resulted from pursuing the complaint, as well as from the original dispute.
62. Mr R disagrees with two aspects of ICE’s analysis, its decision not to uphold Element A of his complaint, and its decision not to make recommendations for redress. We have considered these aspects separately.
63. Mr R complained the DWP acted incorrectly when, on 21 July 2016, it refused to provide him with details of the bank account it had paid his wife’s State Pension into. The ICE said the DWP could not disclose this information over the telephone for security reasons. It therefore decided not to uphold Element A of the complaint.
64. We have not identified any failings in relation to this. As we have explained in our consideration of the DWP’s actions, we agree the DWP could not disclose the bank details to Mr R during the call.
65. We can see ICE considered the actions of the DWP and appropriately highlighted the key mistakes in its service to Mr and Mrs R. We note the evidence DWP has since shared with us would have changed ICE’s view about the notification letter. ICE determined that the DWP should have acted differently, such as keeping a recording of the phone calls when Mr R complained and providing a copy of the BACS report sooner.
66. When we look at ICE’s consideration of remedy, we consider whether ICE took all the relevant factors into account when reaching its decision. ICE had considered the DWP’s special payment to be appropriate redress. It considered how the recipient of the payment was under no obligation to return the money, and there was no guarantee that either of the banks involved, or DWP, would have recovered the payment.
67. Mr R feels the DWP should not have stopped at saying there was no guarantee his bank would have been able to recover the payment. He says the DWP’s “consolatory payment” of £100 was entirely separate from the “lost” money and ICE ‘should have reached a definite decision one way or the other’ about ‘DWP’s liability for some or all of the lost payment’.
68. We agree with Mr R. In line with our Principles of Good Complaint Handling, it would have been reasonable for ICE to explore whether, on the balance of probabilities, the DWP’s delays reduced the likelihood of recovering the payment.
69. Mr and Mrs R knew something had gone wrong when the first State Pension payment did not arrive. However, they could not have known exactly what had happened until they received the BACS report. As we have explained in paragraph 41, we consider it likely the DWP’s actions caused a delay in Mrs R recovering the payment.
70. ICE identified an error but appeared to stop short of exploring the impact in its report, meaning ICE had decided not to award further redress as there would have been no guarantee Mrs R’s bank would have recovered the payment.
71. ICE considers this to be a factual statement. It told us it did consider the impact on the recovery of the payment, but this was not clear to us or the complainants from its report.
72. The information available to ICE included Mr R’s chronology of events. In this, he documented that the bank told him the recipient of the State Pension payment had agreed to a voluntary repayment arrangement. ICE decided it did not need to obtain further information about this before concluding about the impact the DWP’s actions had.
73. It would have been better if ICE had looked into the voluntary repayment arrangement, and what happened after Mr R was told about it. That way it would have been likely that ICE would have known what happened to the payment. This would have affected its investigation. Instead, when ICE enquired about recovery of the payment, and Mr R understandably said his wife had not received any payments from the new bank, it took this at face value.
74. One way of obtaining further information would have been to contact, or ask the complainants to contact, both banks. We contacted the banks as part of our investigation. The second bank told us, ‘Evidence shows internal notes surrounding the payment from DWP and indicates a conversation took place to discuss paying it back, advising this could be done via standing order or direct debit in March 2017.’
75. It explained: ‘statements indicate a standing order started in December 2017 to an account ending in December 2019 total payments made added up to £276.52. Our notes indicate that the DWP payment which was funded to the incorrect account was £276.36 therefore feel the standing order evidenced relates to this payment.’
76. Mrs R confirmed she received these payments. Mr and Mrs R were not aware they related to the State Pension and told us they were relieved to learn this. However, they feel this proves they would have recovered the missing money sooner if they, or their bank, had been able to contact the other bank immediately about the misdirected payment. They say it ‘also led to this very protracted complaint process which would not have been needed if DWP had acted properly in the first place’. We understand why they feel this way.
77. In the absence of additional information, ICE did not identify that the recovery of the payment was in progress. It said that although it was not aware of the repayments, it did take the possibility of them, and potential delays, into account before deciding not to award further redress. In line with our Principles, this is broadly what we would have expected ICE to do.
78. We recognise it would have been better for Mr and Mrs R if this had been clearer in the ICE report. We do not consider ICE’s report was so flawed that it amounts to maladministration. This is why we have not upheld this complaint. We hope our investigation reassures Mr and Mrs R about ICE’s approach.