Student Loans Company

4. Mr A complains about the service he and his daughter, Miss A, received from SLC in late 2021 and early 2022. Mr A tells us he and Miss A submitted an online student loan application to SLC in March 2021 in preparation for her starting university in September 2021.

5. In September 2021, Mr A says the first instalment of the loan did not arrive in Miss A’s bank account. Further enquiries from Mr A and Miss A found it had been paid into another bank account which they did not recognise. They complain SLC paid the first instalment of Miss A’s student loan into an incorrect bank account and this was SLC’s mistake.

6. Mr A also complains both he and Miss A experienced poor customer service when they contacted SLC to correct matters in late 2021 and early 2022.

7. Mr A tells us SLC’s mistake, and their need to contact it to put things right, caused them considerable distress, frustration and anxiety. Mr A also says because of SLC’s mistake, he had to financially support his daughter, which caused additional distress and frustration during an already difficult period.

8. Mr A and Miss A seek an acceptance of errors, an apology and financial compensation.

9. Mr A complains about SLC’s actions following his daughter’s student loan application. Miss A applied for a student loan in March 2021 for the 2021/2022 academic year, which was approved. As part of her application Miss A had to include her bank account details. Miss A started her university course in September 2021 and her first student loan payment was due on 17 September 2021. Miss A’s bank account was with Bank C.

10. Mr A says the first expected payment, totalling £1,459.26, was not deposited in Miss A’s account on the expected date. Miss A contacted SLC on 27 September 2021 to ask about the missing payment. SLC told her the first loan payment had been paid into Bank D, as per the information Miss A had provided when she applied.

11. Miss A explained to SLC she did not have, and had never had, an account with Bank D. She also said her parents did not have an account registered with Bank D. She was advised to contact the Customer Compliance Team (CCT) and was told future payments would be blocked.

12. Miss A called the CCT the following day (28 September 2021) and provided the Bank C account details she said she had used in her March 2021 application. SLC advised her the bank account details she had given in her March 2021 application were different. The account details on the bank application were for Bank D, not Bank C. The account with Bank D, where the first payment was directed, was an internet savings account. Miss A said she would have directed the payments to her current account.

13. SLC advised Miss A the bank account should be in an individual’s own name and said it was unable to check the name for the account with Bank D. SLC explained the bank details appeared to be valid because if they had not been, the payment would have failed. SLC explained payment could not be classed as fraud as she had provided SLC with the Bank D account details.

14. She was advised to get in touch with Student Finance England (SFE) to see if it could do a trace on the account to establish who had received the payment. SFE acts on behalf of SLC in providing student finance in England. The CCT said as there was no fraud element to her concerns, it was unable to help further.

15. Miss A called SFE the same day and explained nobody in her family had an account with Bank D. She was told the Bank D account details were included in the original application made in March 2021 and at no point had anybody called to change the details. Miss A asked for the name of the Bank D account holder. The SFE said it could not help with this and advised her to call the CCT and ask it to investigate the matter as possible fraud.

16. Miss A called the CCT on 1 October 2021 and set up a ‘Consent to Share’ (CTS), which allowed her father, Mr A, to speak with SLC and the CCT. Miss A was asked if she had an account with Bank E; Bank D is a division of Bank E. The CCT said she should ask her parents if they had any accounts with Bank E.

17. Mr A called SLC the same day and explained when Miss A filled in her student loan application in March 2021, he had sat with her and provided the bank details. Mr A confirmed Miss A’s bank details during the call and SLC reiterated that Miss A’s account details were not the account details they held. Mr A said Miss A could not have given the details for a Bank D account, as they did not bank with it.

18. SLC told Mr A it seemed to be an issue for the CCT. Mr A explained Miss A had previously been advised the CCT could not deal with the matter and therefore did not wish to be referred to the CCT. He requested a callback from a manager and asked for the Bank D account details used on the application. Mr A was told these could not be given.

19. Mr A called SLC again on 4 October 2021. The call notes show he was advised to send a letter outlining what had happened and include the correct bank details for Miss A. The records show there was an internal call explaining why the matter was not fraudulent; namely, because the bank details Miss A submitted on the application had not been changed. Mr A wrote to SLC on the same day and asked for a trace to be made to Bank D.

20. SLC called Miss A on 11 October 2021 and asked her to get in touch. Mr A called back and provided his password for the CTS service. However, it was incorrect and he was therefore advised Miss A would need to call back herself.

21. Mr A called again later that day and offered a different password. He was again told the password did not match. He said Miss A had given him both passwords and he explained the history of Miss A’s student loan application and reiterated the request for a trace of the Bank D account. He was told his letter had been received, including the request to change the bank details, but was advised this request needed to come from Miss A herself.

22. Mr A said he was not asking for the account details to be changed and was requesting a trace on the Bank D account. The records show he was told a trace would need to be arranged, and Mr A said this should have happened already as he had previously asked for it. The operator explained they needed Miss A’s correct bank details to update her file before doing the trace.

23. Miss A wrote to SLC and repeated what Mr A had said to SLC on 4 October 2021. Mr A called the CCT on 2 November 2021 and explained the background of the application. He was told SFE was doing the trace rather than CCT, which deals with fraud cases. As explained above, Miss A’s case was not deemed to be fraudulent. Mr A was told there had been no change to the bank details since the loan application had been submitted. Mr A repeated this was impossible as he would not have given those bank details.

24. Mr A called SFE that same day. He asked for an update and provided a password, which was incorrect. Mr A repeated the history and was advised that Miss A would need to phone to update the CTS.

25. Miss A called on 3 November 2021 to update the CTS and asked to do this over the phone. The adviser asked her to do this on Google instead and Miss A reiterated she wished to set this up over the phone.

26. The adviser told her she already had a CTS in place, so she said she wanted to set up a new password. The adviser said as she had a CTS in place, she could not set up another CTS without deleting the existing CTS. Miss A said the password did not work and SFE had said it was incorrect. The adviser said they could remove the CTS.

27. Miss A asked for the password to be changed and the adviser explained this was not possible because they could not tell her the current password. As the CTS was active, they could not make amendments without removing the CTS. The adviser asked a colleague for help and told Miss A the password could not be changed, although she could do this online.

28. The adviser told Miss A the current CTS would need to be deleted so a new CTS could be set up. Miss A was told she would need to wait 24 hours and then call back to set up her new CTS. The adviser said the CTS had been removed (Miss A said she did not wish for the CTS to be removed) and the adviser explained a new CTS could be set up, although they could not do this personally.

29. Miss A asked to be transferred to an adviser who could help. The second adviser tried to set up a new CTS and Miss A gave her father’s name and a new password. Miss A was told it would take up to 24 hours for it to be added to the system. The adviser said it would need to be saved on the system although they were unable to do that. Miss A asked if someone else was able to do this and she was told to call back and speak with another adviser who may be able to help; the adviser was unable to transfer the call. Miss A was told the CTS had changed.

30. Mr A called SFE on 4 November 2011 for an update and said he had been told the new CTS would take 24 hours to process. Mr A was told there was an older CTS on file, but not one from the previous day and as Miss A was not with Mr A, the CTS could not be set up again. Mr A said his daughter had been very distressed during the calls to discuss these issues and had asked him to speak on her behalf.

31. Mr A called again that same day and gave the password Miss A had given him. The adviser said this was the old password and explained what had happened so far. Mr A asked for a trace again and the adviser said they needed a bank statement from Miss A as she would have been aware of the bank account on her account. Mr A said it only showed the last four numbers, which did not match her bank account. The adviser said they would need to send a letter outlining this and Mr A said this had been done already.

32. The adviser said it could be a phishing attempt and recommended Mr A and Miss A speak with CCT. Mr A explained CCT had said he should speak with SFE and the adviser said there was a phishing line he could call instead. The number was the same as CCT and the adviser said this meant the CCT did not believe it was phishing or fraud. As he had done previously, Mr A asked for the Bank D account details, and the adviser said this information could not be given.

33. The adviser said the Bank D details could be shared with Miss A, but Mr A had given the CTS password three times and it had been incorrect. The adviser said they would need to see a letter with an explanation of what had happened. Mr A said he had sent two letters and had a letter from Bank D confirming he did not bank with them and said he would ask Miss A to get one too.

34. The adviser said Miss A needed to fill in a form updating her bank details as her first payment had gone to Bank D. Mr A asked, if Miss A submitted the correct bank details, whether she would then receive the first student loan payment. The adviser said she would not, as the payment had already been made. Mr A told the adviser he believed someone had added the wrong bank details after she had submitted the application.

35. The adviser said the payments had been blocked and Mr A said he wanted an investigation and for SFE to call Bank D and ask for an answer. Bank D could give an answer in 48 hours. Mr A said he had asked for a trace six weeks prior and it still had not been done. The adviser said it usually took more than 48 hours and said he could refer the matter to the police.

36. Mr A said he had worked for the police and believed the issue was with SLC and related to fraud. The adviser said they could not edit the bank details. Mr A said he understood this but said he wanted to know where the money had ended up.

37. Mr A submitted a written complaint on 8 November 2021 and outlined the history of the case. He said for Miss A to amend her bank details online, she needed the full account details submitted. He said only the last four digits of the account number and sort code were displayed. His letter said he was not reporting the matter as fraudulent but he wanted SFE to look into it further.

38. Internal SLC correspondence shows an alert on the system was closed as the Data Security Analyst could not see any signs Miss A had applied for a change of bank details. The correspondence reiterated previous comments that it was possible the Bank D account belonged to Mr A and said SLC would wait for evidence from Miss A before changing the account details.

39. SLC correspondence went on to provide the account number and sort code used in Miss A’s application, which were the same as the account details used for the first payment on 17 September 2021. There was a note to say that CCT did not consider the matter to be fraudulent as Miss A had provided the bank details in her March 2021 application.

40. Mr A called SFE for an update on 8 November 2021 and the adviser said the CTS was due to expire on 1 November 2021. Mr A said his daughter had set up a second CTS on 1 November 2021 which should still be valid and the adviser said Miss A would need to contact them about that.

41. Miss A called SFE on 27 November 2021 and passed the call over to Mr A, who asked for an update. The adviser said the completion date for the enquiry was 2 December 2021 and Miss A’s online account would show when she was due to receive the money. The adviser confirmed the block on payments had been lifted.

42. A Customer Relations Officer (CRO) issued a Stage 1 response on 6 December 2021. This said there had been no fraudulent activity on the account, and the first payment had been made to the account details provided on the March 2021 application. The trace Mr A had asked for had not been undertaken. This is because although the CTS was in place at the time of the letter, Miss A also needed to write to them to ask for a trace.

43. Miss A did write to them (as referenced above) and initially SLC did not act on her letter. SLC updated her information on 17 November 2021 and arranged a trace on the first payment, which takes up to 30 days. The Stage 1 response explained that if the payment could be recovered, it would be paid into Miss A’s account.

44. However, if it was not recoverable, Miss A would be liable to repay the first payment as part of her overall loan balance, along with any interest. In this instance, there would be no additional payments by SLC to cover the ‘lost’ payment of September 2021.

45. Miss A responded on the same day (6 November 2021) and explained the impact SLC’s actions were having on her and outlined the difficulties she and her father had when dealing with the CTS. Miss A said she did not believe she was liable to repay the September 2021 payment.

46. SLC issued another response on 20 December 2021 and apologised for the service she had received. The letter reiterated SLC’s view that the first payment had been made without error as it was deposited into the account provided on the application in March 2021, which had not been altered or amended.

47. Miss A responded again on 21 December 2021. She repeated her earlier comments and added her next payment was showing online as ‘blocked’. The CRO replied on 11 January 2022 and said the payment had been unblocked. They also said Miss A’s letter requesting a trace was not reviewed until 17 November 2021 because of delays to processing times.

48. The CRO confirmed SLC’s bank had not received a response from Bank D and this meant they could not recover the funds. As explained above, this leaves Miss A liable for the first loan payment of September 2021.

49. Miss A asked for the matter to be escalated on 17 January 2022. SLC submitted a second trace request on 2 February 2022. Miss A’s MP wrote to SLC on 21 January 2022 and received a response on 21 February 2022 reiterating SLC’s previous position; namely, that the payment was not fraudulent and Miss A remained liable.

50. Miss A wrote to the CRO on 2 February 2022 and said recovery of the September 2021 payment was the only viable option. She submitted a data access request, with the correct Bank C account details, and asked if this was the information currently held. In addition, she asked for her original application and provided supporting letters from Bank D stating neither she, nor her father, had accounts with Bank D.

51. One of the supporting letters from Bank D said for a payment to be accepted, the name on the account must marry with the sort code and the account number. In cases where this does not happen, the payment should be returned. In this case, that would mean if the name on the recipient account had not matched the relevant sort code and account number, the September 2021 payment should have been returned to SLC.

52. Miss A asked if SLC had an account where returned payments were sent. Miss A said the Bank D manager had also said it was possible to search for the payment, and if this was unsuccessful a return payment may be commenced.

53. The CRO wrote to Miss A on 10 March 2022 to let her know the second trace attempt had been unsuccessful. She responded the same day and said Mr A had sat with her while she filled in the March 2021 application and he had been a long-serving police officer, so they could not have provided the wrong bank details.

54. The CRO wrote to Miss A again on 14 March 2022 and said Bank D confirmed they had been unable to recover the payment. The reason for this was ‘Non-Recovery- No response/authority given by the other bank’.

55. The records show an internal letter on file dated 25 March 2022 from an engineer at SLC working in the Application Operations Team. It relates to bank details history and says: ‘I can fairly confidently say that the bank details were updated by the student as they were updated in our system by the student submitting their online account.’

56. The internal letter also included a chart with entries for 24 March 2021 (when the application was submitted online) and for 17 November 2021 (when the bank details were changed).

57. The case was referred to the Independent Assessor (IA) for a review on 1 April 2022. The IA provided its response on 29 April 2022 and did not uphold the complaint.

Our view

60. Mr A and Miss A both say they entered the correct account details when making the student loan application on 24 March 2021. They maintain there was no error on their part and say the bank details must have been changed or altered after the application was submitted. Both have gone so far as to say a fraudulent act must have taken place between the application being submitted in March 2021 and the first payment being paid in September 2021.

61. Following the concerns Mr A and his daughter raised, SLC looked into their suggestion that fraud had been committed. The records show the bank account entered on the application form on 24 March 2021 was identical to the bank account that received the first payment in September 2021. As such, SLC is satisfied the cause of the problem was human error on the part of Miss A.

62. Mr A and his daughter say they entered the correct details for Bank C and a third party accessed the application after submission and amended the bank details. SLC says there is no evidence on its system which shows the bank details Miss A entered were changed after entry.

63. As part of its investigation, an engineer from the Application Operations Team investigated the audit trail of the application and did not find evidence that anyone other than Miss A had entered the Bank D account details.

64. As part of its investigation, the IA received correspondence from a Customer Compliance Complaints Manager (CCCM) on 12 April 2023. This stated that based on the date the application was received, and the date of the approval shortly after, they could not see how the bank details Miss A entered could have been changed. To establish this, they considered the different interactions on the portal.

65. SLC said the system showed that from March 2021, when the application was submitted, to 27 September 2021, when Miss A first used the system, there was no evidence of others accessing the application. This means the digital ‘paper trail’ does not show anyone other than Miss A accessing the application. SLC concluded the only possibility, based on the evidence, was of a user error by Miss A in March 2021.

66. Miss A and Mr A are adamant that when they submitted the application to SLC in March 2021 they inputted the correct details. By contrast, SLC says there is no evidence to show there has been any fraudulent activity on the application between its submission in March 2021 and September 2021 when the first payment was made.

67. As part of our consideration of the complaint, we asked SLC for any evidence it has to support its views; namely, that Miss A submitted the incorrect bank details and they were not the result of fraud. SLC has provided us with a copy of the online application form, which clearly shows the bank details provided are incorrect. This includes the sort code, the account number and the name of the bank. These details match the Bank D account details.

68. In addition, this form has a small alert box on it showing when the information was inputted. This clearly shows a date in March 2021 when Miss A applied for student finance.

69. Throughout SLC’s complaints process and the IA’s investigation, Miss A has said the Bank D account details on her application form must be the result of fraud. However, the evidence SLC sent us clearly shows the Bank D details were submitted on March 2021 when Miss A applied for student finance.

70. Miss A and Mr A have both said they believe fraudulent activity happened, and we have thought carefully about this. We have not seen any evidence to support the concern any inappropriate third-party activity took place.

71. Therefore, we cannot see any signs of maladministration (fault) in SLC’s investigation and conclusions, as SLC has provided clear evidence to show the Bank D account details were provided on the original application and has taken steps to thoroughly investigate the complaint.

72. This is in line with our Principles of Good Administration, which say: ‘In their decision making, public bodies should have regard to the relevant legislation. Decision making should take account of all relevant considerations, ignore irrelevant ones and balance the evidence appropriately.’

73. We appreciate this outcome will very likely be upsetting for Miss A, as she remains liable for the first payment. We hope it is reassuring to her that the available evidence shows no one has interfered with her personal details. This evidence shows that overall, it is more likely there was an error in completing the form, rather than any error on the part of SLC once it was completed.

74. Our Principles of Good Administration say public bodies ‘should follow their own policy and procedural guidance, whether published or internal’, and in processing Miss A’s application there is nothing to suggest SLC failed to do so.

75. Moving on from the application itself, we have considered what action SLC took after Miss A alerted it to her concerns about the payment. During its correspondence with Miss A and her father, SLC said although Miss A did not receive the first payment she will ultimately remain liable for repaying it, as it is part of her original application.

76. Miss A is distressed by this, and Mr A has told us that having to cover the costs of the payment has resulted in a financial strain for him.

77. SLC says that as a public body it needs to manage its student support scheme in line with the legislation set by Parliament. The Regulations specifically outline the circumstances in which students are entitled to support.

78. As the rules relating to student support and finance are written in law, SLC must act within those limitations, and the legislation is very clear about the obligations it sets out for all parties. The application process is covered by section 8 of the Regulations, which state:

‘8.—(1) A person (the “applicant”) must apply for support in connection with each academic year of a designated course by completing and submitting to the Secretary of State an application in such form and accompanied by such documentation as the Secretary of State may require.’

79. The legislation makes it clear it is up to the applicant to make sure the information they provide to SLC is accurate. As we can see from section 11 of the Regulations, when an individual applies for student support they are entering ‘a contract with the Secretary of State’.

80. Schedule 3 of the Regulations covers the issue of information and explains applicants should provide any information that ‘the Secretary of State requires for the consideration of these Regulations’. In this case, the onus is on the individual applicant to provide accurate information, such as correct bank details.

81. We understand the frustration and distress Miss A and Mr A have experienced. Having considered the Regulations, we cannot see any evidence SLC has acted improperly. The Regulations make clear those applying for student support must make sure the information they provide is accurate, and it does not include provision for the state to write off a financial loss caused by an applicant’s error. If it were to do so, the public purse would lose out because of an individual’s mistakes.

82. Therefore, we cannot see any signs of failings in SLC’s actions regarding its decision not to write off the first payment. As it has explained to Miss A, it has no discretion to do this. As such, we will not be taking any further action.

83. In addition, Mr A complains about the service he and his daughter received from SLC from September 2021 onwards. During their initial contact with SLC, Miss A and Mr A were passed between CCT and SFE, which should not have happened. The IA report notes that from the outset Miss A should have been advised to write to SLC with a cover letter including the correct bank details. However, as we know from the timeline, she was not.

84. There were also occasions where Mr A was told he would receive a callback and he did not. Moreover, Mr A was incorrectly told to write with Miss A’s bank details. As both were advised later, only Miss A could write with this information, which meant that asking Mr A to write caused delays and confusion, and compounded Miss A and Mr A’s frustration. This is most obvious in relation to the question of a trace on the Bank D account.

85. The other area of concern relates to the CTS which Miss A set up to enable her father to speak freely with the CCT and SFE on her behalf. As we can see from the timeline, SLC did not set this up effectively and we know this caused Miss A considerable distress. The IA report concluded the CCT did not handle her concerns appropriately.

86. We agree the service provided was not in line with Our Principles of Good Administration, which say organisations should ‘provide services that are easily accessible to their customers. Policies and procedures should be clear and there must be accurate, complete and understandable information about the service’. They should also ‘do what they say they are going to do’. That did not happen here.

87. The SFE accepted these errors and apologised for making them. However, the IA report decided that these errors were significant enough to warrant a payment of £100 in recognition of the distress and inconvenience caused.

88. In our view, this is a proportionate response and in line with our Principles of Good Complaint Handling, which state financial compensation may be recommended for inconvenience and distress, which is the injustice we have identified in this case.

89. Our severity of injustice scale explains a payment of £100 shows a Level 2 injustice, which represents an event that has caused ‘a degree of distress, or inconvenience’. This is in line with the IA’s recommendations, and appears proportionate based on the events and the impact they had on Mr A and Miss A.

90. We can see that because of poor communication Miss A and Mr A experienced a certain amount of frustration and distress and, as such, the recognition of poor service, apologies and compensation provided are enough to put things right.

91. Therefore, we have decided to take no further action.

1. The Parliamentary and Health Service Ombudsman has carefully considered Mr A’s complaint about the Student Loans Company (SLC). Having looked at the evidence available to us and the relevant standards and guidance, we have decided not to take any further action. Although we have seen signs of poor service by SLC, it has already taken appropriate action to put things right.

2. We appreciate Mr A feels frustrated and upset by SLC’s decision. In reaching our view, we have thought carefully about the concerns Mr A raised and what he told us.

3. We hope this statement clearly sets out why we have reached our decision to take no further action.