HM Revenue and Customs

3. Mr N complains that HMRC has not taken action to ensure a DCA working on its behalf deals with his complaints effectively. Mr N believes HMRC has a responsibility assist him in raising his complaints as HMRC incorrectly gave his information to the DCA and Mr N never owed any debt.

4. Mr N says the DCA harassed him for six months chasing a debt that he never owed, causing him added stress and anxiety. He has also had the added stress of trying to get the DCA to answer his complaints, as well as taking the time and effort having to contact other organisations to assist him in getting his complaints addressed.

5. Mr N wants HMRC to take responsibility for its error and ensure his complaint is fully dealt with by the DCA. Mr N would also like financial redress for the added time and effort it has taken him to address these issues, and for the added stress and anxiety this has caused. Mr N would also like HMRC to review its services, so any customers faced with similar issues are supported to come to a timely resolution.

6. In July 2021 Mr N received a text message informing him that he needed to make a payment for a debt to HMRC.

7. Mr N contacted HMRC by telephone to confirm he was not in debt to it. HMRC confirmed Mr N owed no debt to HMRC, but due to human error it had added his telephone number to another unconnected account, which did owe a debt to HMRC. As this error was down to HMRC, it offered Mr N a consolatory payment of £100 in recognition of its mistake.

8. HMRC then informed the DCA that this had been a mistake on its part and Mr N owed no debt to HMRC. Despite HMRC informing the DCA of its error, for around six months, Mr N continued to receive text messages and recorded telephone messages from it asking for payment of the debt.

9. At the start of 2022 Mr N made a formal complaint to the DCA about its continued contact as well as failing to respond to issues he had raised with it.

10. In February 2022, as Mr N had still not received a response from the DCA, he raised his complaint with the Financial Ombudsman Service (FOS), the Credit Services Association (CSA), and the Information Commissioner’s Office (ICO).

11. In January 2024 the CSA upheld Mr N’s complaint against the DCA. CSA told the DCA that its response did not fully address Mr N’s complaint and asked it to write to him again with a more detailed response. As the issues had still not been resolved, Mr N raised a formal complaint with HMRC. He told it the DCA had still not responded to his complaints and as a result he wanted HMRC to consider the matter again.

12. HMRC responded to Mr N’s complaint in February 2024. It told him the DCA informed HMRC it had responded to Mr N, but HMRC had not seen a copy of that letter. It also confirmed the DCA had recently sent Mr N another response. h HMRC confirmed the letter contained an apology and a contact number for the DCA if he was still not satisfied how it had responded to his complaint.

13. In this response HMRC also confirmed it has no authority to instruct the DCA to pay Mr N financial redress. All it could do was ask the DCA to address Mr N’s complaint, which it could see the DCA had done.

14. As Mr N remained unhappy with how HMRC had dealt with his complaint he escalated it to the Adjudicator’s office (AO). When the AO completed its investigation into Mr N’s complaint it explained that it could see HMRC had spoken with the DCA on Mr N’s behalf. The DCA has apologised and provided a copy of their complaint response to HMRC. The AO suggested If Mr N dissatisfied with this response, it would be for him to take this up with DCA, or the Financial Conduct Authority who regulate them. The AO concluded that the matters Mr N was complaining about were ultimately a contractual matter that it had no remit to consider.

15. As Mr N remained unhappy with how his complaints to HMRC had been dealt with, he approached our office via his MP.

HMRC has not taken action to ensure a DCA working on its behalf deals with his complaints effectively.

18. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the organisation has got something wrong. We do this by comparing what should have happened with what did happen. We have done this and have not found any indications that something has gone wrong with how HMRC addressed Mr N’s complaint.

19. Mr N told us, ‘HMRC instructed a debt collection agency, to pursue me for a debt to HMRC. However, this debt never existed, and HMRC admitted they had sent my contact details in error. [The DCA] then harassed me for some six months, asking me to make this non-existent payment to HMRC, and ignoring communications from me about this. HMRC has compensated me for their error. However, I also asked HMRC to instruct [the DCA] to contact me with an offer of redress for their harassment for me. I believe it is reasonable for me to expect this support from HMRC, given their initial error caused this problem’.

20. Mr N also told us, ‘[the DCA] has not offered redress for their harassment of me. Moreover, [the DCA] has ignored all communication from me on this matter, throughout the entire period. I believe that HMRC has a responsibility to ensure that [the DCA] offer redress, given that HMRC caused this entire situation with their initial error handling my personal data. HMRC has said they do not have the authority to instruct [the DCA] to offer redress, but I do not agree with this: HMRC instructed [the DCA], in error, and so they have responsibility and authority to resolve this’.

21. In its complaint responses HMRC told Mr N, ‘In respect of claiming redress from [the DCA], you would need to do this directly with [the DCA] through their complaints process as we cannot influence this. We can only ask them to follow the procedure and respond to your complaint, which we have done, but have no authority on how they deal with it’.

Our View

22. We understand Mr N remains frustrated that HMRC has not been able to assist him in coming to a satisfactory conclusion of his complaint with the DCA. We can see receiving calls and texts for a debt that did not exist would have been stressful for Mr N, and we are sorry to hear about the negative impact this had on him.

23. HMRC uses private debt collection agencies as part of its broader strategy to recover unpaid taxes when individuals or businesses fail to engage with them or refuse to pay what they owe. Using private agencies allows HMRC to focus its internal resources on more complex or high-value cases. Debt collection agencies can handle routine or lower-value debts more efficiently, helping HMRC manage its workload.

24. From the evidence available to us, we have established that HMRC do not have a direct contractual relationship with any DCA. HMRC’s contractual arrangements for private sector debt collection is through the government Debt Resolution Services agreement. This agreement was designed to bring together a range of debt recovery solutions and data services into a single commercial agreement.

25. As this is the case, we can see there is no direct commercial agreement between HMRC and the DCA that sets out specifically how HMRC expects the DCA to deal with complaints. It also means there is no contractual agreement between the two parties that gives HMRC any authority to instruct the DCA to deal with complaints in a certain way, or that allows HMRC to instruct the DCA to make financial redress payments in the way Mr N wants it to.

26. This agreement does set out that HMRC will only use debt collection agencies who are Financial Conduct Authority (FCA) authorised and regulated. If a DCA is FCA regulated, it means the firm is authorised to carry out debt collection activities in the UK. This regulation provides several important protections and assurances. If a consumer feels mistreated, they can escalate complaints to the Financial Ombudsman Service. This would not be possible with an unregulated firm.

27. From the information available to us, we can see that when Mr N initially made HMRC aware of the issues he was experiencing, it addressed his complaint and offered him financial redress of £100. This was for its mistake in adding Mr N’s contact details to an unrelated company. It has then contacted the DCA to ask it to address Mr N’s complaint.

28. We can see that at the start of 2024, when Mr N contacted HMRC again to inform it his complaint had still not been resolved, HMRC took steps to contact the DCA again. In February 2024 the DCA provided HMRC with a copy of a reply it was sending Mr N in relation to his complaint. As HMRC had seen a copy of the complaint reply it was satisfied that the DCA had responded to Mr N’s complaint.

29. When we considered if HMRC had done what it should have done in relation to Mr N’s complaint we have reviewed the standards of behaviour set out in ‘The HMRC Charter’. The Charter states HMRC will, ‘answer your questions and resolve things first time, or as quickly as we can. We’ll also explain what happens next and when you can expect a response from us. If we make a mistake, we’ll put it right as soon as possible’. We found HMRC addressed Mr N’s original complaint, identified it had made a mistake and offered him financial redress for its mistake. This is in line with its Charter.

30. We can see HMRC engaged with the DCA to ask it to address Mr N’s complaint. When Mr N contacted it again to say his complaint had not been dealt with, HMRC completed follow up action to ensure the DCA responded to Mr N’s ongoing complaint. When it did this, HMRC informed Mr N it expects the DCA to address his complaint, but that it had no authority to order it to make a financial redress payment to him.

31. We can see that HMRC noted that to take so long for a straightforward complaint to be resolved does not reflect well on the DCA, and it would not have been unreasonable to expect it to have offered some kind of discretionary payment. However, it confirmed it has no legal power to instruct the DCA to do so. HMRC also confirmed it was completing a review of the case to ensure agencies working on its behalf learnt lessons from it and embedded any lessons learnt into its guidance. Although this will not ultimately benefit Mr N, we hope it gives him some reassurance that HMRC has taken his complaint seriously.

32. We know Mr N expects HMRC to be able to instruct the DCA to make a financial redress payment to him. As HMRC has no contractual arrangement with the company that sets this out, it has no legal power to do this. By explaining this to Mr N, HMRC has acted in line with our ‘Principles of Good Administration’ that say, ‘Public bodies should aim to ensure that customers are clear about their entitlements and about what they can and cannot expect from the public body’.

33. We can see HMRC addressed Mr N’s complaint, in line with its Charter and it has been clear that it cannot instruct the DCA to make a financial redress payment to him. As this is the case, we have found no indications of maladministration in how HMRC handled the issues Mr N complaint about. As such, we will take no further action.

34. We understand Mr N remains unhappy that HMRC have done more to help him and these issues have caused him added stress, we hope the explanations we have given help Mr N understand why we have come to this decision.

1. We have carefully considered Mr N’s complaint about HM Revenue and Customs (HMRC). We understand Mr N brought his complaint to us as he remains unhappy that HMRC did not do enough to ensure a debt collection agency (DCA) working on its behalf dealt with his complaint. We understand Mr N feels HMRC should have assisted him more to resolve the issues, as it was because of its mistake, that the DCA pursued him for a debt he did not owe. We can see this would cause Mr N added stress and anxiety and are sorry to hear about the negative impact this had on him.

2. Having reviewed all the evidence available to us we have seen no indication that anything went wrong with how HMRC dealt with the issues Mr N has complained to us about. This is because we can see HMRC took steps to ensure the DCA addressed Mr N’s complaints, but it is unable to instruct the DCA to pay him financial redress, as he wishes. We explain in detail below how we reached our decision in this case.