SPSO Individual Decisions

Mr C complained about the way that the Office of the Accountant in Bankruptcy (AIB) investigated an issue regarding debts in his Debt Arrangement Scheme (DAS - statutory debt management scheme introduced by the Scottish Government) Debt Payment Programme (DPP - a programme that allows a debtor to pay off their debt over an extended period of time) after one of his debts was written off by the creditor. Having investigated this matter, the AIB established that the incorrect debt had been removed from Mr C's debt payment plan. The AIB said that inaccurate information in the DAS application had contributed to this error. The AIB apologised to Mr C for the error and offered reassurance that the removal of the wrong debt had not been of detriment to him. We found that there was limited documentation of the initial investigation carried out once the AIB were informed of an issue with one of the debts. We were unable to find satisfactory evidence to support the AIB's conclusion that the error had not been detrimental to Mr C. Therefore, we upheld this part of Mr C's complaint. Mr C also raised concern that the AIB did not provide a full response to his complaint. We found that the AIB had not informed Mr C whether he had overpaid his debt payment programme despite this being a point he raised concern about. We also found that the AIB's complaint response indicated to Mr C that it was their intention to make a complaint to the Financial Conduct Authority (FCA) regarding issues experienced with one of the creditors. The AIB acknowledged that when it subsequently became apparent that this would not be possible, they should have updated Mr C. We upheld this part of Mr C's complaint.

Mr C was owed a significant sum of money by a builder who had been declared bankrupt. In June 2005, the builder moved assets into his mother's name. The Office of the Accountant in Bankruptcy (AiB) successfully challenged this in court and raised an action against the builder. Mr C complained about the length of time that it took for the AiB to recover money from the builder and to pay creditors. We found that the sequestration of the builder's estate was complex and was always going to take time. Ultimately it took more than seven years to pay creditors, and we did not consider this reasonable. Whilst there is no target timescale for the sequestration process and the relevant legislation allows unlimited extensions, our investigation found that the AiB themselves had caused at least fifteen months' worth of avoidable delays. We considered that the individual actions taken to sequestrate the estate were reasonable, but they were carried out in a very linear way and we felt that some tasks could have been completed concurrently rather than waiting for another task to be completed first. Furthermore, midway through the process the builder questioned the amount that Mr C was claiming. This led to the AiB reinvestigating the claim over several months in anticipation of a possible formal challenge. We considered that challenges should be anticipated as a matter of course and that the additional investigation should have either taken place at the start of the claim process, or upon submission of a formal challenge from the debtor.

Ms C had been made bankrupt, and the Office of the Accountant in Bankruptcy (AiB) was handling matters relating to her bankruptcy. She complained that AiB unreasonably delayed in dealing with payment protection insurance compensation funds and failed to respond adequately to her request for information. We told Ms C that we could not look at what AiB did with the funds, but that we could look at how they responded when she queried this. Our investigation found that it took AiB seven weeks to deal with this, although they had explained the delay to her. In the circumstances, while the length of time taken was not ideal, we did not uphold this complaint. We did, however, uphold the complaint that they failed to respond adequately to her request for information. We found that although there was no evidence that AiB misinformed Ms C, there was nothing to show that they had actively kept her informed during their investigation about what was happening or when it was likely to be concluded. To do so would have been in keeping with good practice in dealing with correspondence and complaints.