Summary: Ms B complained the Council delayed recovering an overpaid direct payment, failed to properly explain the amount outstanding and wrongly said she had agreed a repayment plan. The Council was not at fault for the way it told Ms B about the amount outstanding or for the payment plan amount. However, the Council delayed following up with Ms B when payment was not received. The delay caused Ms B distress. An apology is satisfactory remedy, taking into account the length of time Ms B has had without having to pay the amount owed back to the Council.

The complaint

1. The complainant, whom I shall refer to as Ms B, complained the Council:
• failed to properly explain how it had calculated an amount she owed before seeking recovery;
• wrongly said she had agreed to pay back the outstanding amount at £50 per month;
• delayed pursuing her for the outstanding amount; and
• failed to address her queries about the outstanding amount when she contacted it in 2017.

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The Ombudsman’s role and powers

2. 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)
3. If we are satisfied with a Council’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)

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How I considered this complaint

4. As part of the investigation, I have:
• considered the complaint and Ms B's comments;
• made enquiries of the Council and considered the comments and documents the Council provided;
• Ms B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Chronology of the main events

5. Ms B received a direct payment from the Council until 2014. When the Council closed the direct payments account in June 2014 it wrote to Ms B to tell her she needed to repay £3,097.67. A Council officer spoke to Ms B’s daughter in July 2014 when a payment plan of £50 per month was agreed. The Council did not write to Ms B to confirm the payment plan and Ms B says she understood the Council had agreed the debt was not due.
6. Ms B contacted the Council again in March 2017. Ms B told the Council she understood the Council had cancelled the debt. The Council referred the case for consideration. There is no evidence of further contact until February 2019 when Ms B contacted the Council again. Ms B told the Council she had understood the debt was not due. The Council told Ms B the amount was outstanding and she needed to repay it.
7. As the Council had not received any payment it issued a letter before action to Ms B in October 2019 asking for payment or contact within 14 days. Ms B contacted the Council to tell it she had understood the debt had been cancelled. The Council confirmed in November 2019 Ms B needed to repay the outstanding amount.

The Council’s collections strategy

8. The Council’s policy for recovery of debts says any request to pay by instalments is referred to the debt team who will contact the debtor to obtain details of their income/expenses and offer. The debt team then has the delegated power to accept or reject any offer made. If the offer is not considered reasonable they will tell the debtor and try to negotiate a better offer although they may have to refer the debt to external collection agencies or for legal action if no better offer is forthcoming. The policy says if a debtor fails to pay an instalment the Council will contact them and remind them a missed payment means the whole of the debt becomes immediately due and normal recovery procedures will be applied.

Analysis

9. Ms B says the Council failed to properly explain how it had calculated an amount she owed before seeking recovery. The evidence I have seen satisfies me the Council wrote to Ms B in June 2014 to tell her about the amount she needed to repay. I am satisfied the Council followed that up by sending Ms B an invoice detailing the amount. The Council’s letter explained it had calculated the amount outstanding following reconciliation of her final returns. I am therefore satisfied the Council promptly told Ms B about the amount outstanding. If Ms B had concerns about the amount outstanding or how the Council had calculated it I would have expected her to raise that with the Council at the time. I have seen no evidence Ms B did that. Rather, the evidence I have seen satisfies me Ms B’s daughter contacted the Council after Ms B received the invoice to discuss a payment plan. As I am satisfied the Council properly told Ms B of the amount outstanding and she did not query it with the Council at the time I have no grounds to criticise it.
10. Ms B says the Council wrongly said she had agreed to pay back the outstanding amount at £50 per month. Ms B says she could not have made that agreement because she could not have afforded £50 per month. The evidence I have seen though satisfies me Ms B’s daughter spoke to the Council after Ms B received the invoice in June 2014. The note of that telephone call records Ms B’s daughter told the Council Ms B could afford to pay back the outstanding amount at £50 per month and the Council agreed to accept that and review it in six months. As the documentary evidence shows the payment arrangement was made I have no grounds to criticise the Council.
11. I am, however, concerned the Council has provided no evidence to show it wrote to Ms B to confirm the payment plan agreed. Had the Council done that it would have given Ms B an opportunity to raise any concerns she had about the amount agreed. I am also concerned the Council did not follow up with Ms B when it did not receive any payment from her. The Council’s policy on recovery of debts, which I refer to in paragraph 8, says if a debtor fails to pay an instalment the Council will contact them to remind them about the missed payment. Again, if the Council had done that it would have given Ms B an opportunity to make any representations about the amount she had to pay back. Failure to follow up with Ms B in 2014 is fault. I am also concerned there is no evidence of any further contact with Ms B until 2017 and then a further gap until 2019. That is also fault. I am particularly concerned about that given Ms B queried with the Council in 2017 about whether the amount had been cancelled. Failure to respond to that point and instead to continue to seek to recover the debt without considering Ms B’s representations until 2019 is fault.
12. I now have to consider what injustice fault by the Council has caused Ms B. It is clear Ms B believes the Council agreed to cancel the debt in 2014. However, the documentary evidence does not support that. There is no evidence the Council told Ms B it agreed to cancel the debt. I am also satisfied the Council has properly calculated the amount outstanding. I therefore cannot recommend the Council write off the debt. As the debt is owed by Ms B and remains unpaid after six years I consider Ms B has obtained a financial advantage in not having had to pay the debt back over the last six years. In effect, Ms B has retained money to which she is not entitled. I therefore do not consider a financial remedy appropriate in this case. Instead, I recommended the Council apologise to Ms B for the failure to confirm the repayment plan in writing in 2014, failure to follow up with Ms B in 2014 when she did not pay in accordance with the payment plan and failure to confirm in 2017 the debt remained outstanding and needed to be repaid. The Council should then ensure it liaises with Ms B about recovery of the amount owed. I also recommended the Council send a memo to officers dealing with customer debts to remind them of the need to follow the debt recovery policy. That memo should remind officers of the need to confirm any payment plan agreed in writing and to ensure a system is in place to follow up with debtors promptly if payments are not received. The Council has agreed to my recommendations.

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Agreed action

13. Within one month of my decision the Council should apologise to Ms B for the failures identified in this statement and liaise with her about the outstanding debt.
14. Within one month of my decision the Council should send a memo to officers dealing with debt recovery to remind them of the need to follow the Council’s policy when pursuing repayment. That memo should remind officers of the need to confirm any payment plans in writing and ensure a process is in place to follow up promptly when a payment is not received.

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Final decision

15. I have completed my investigation and found fault by the Council in part of the complaint which caused Ms B an injustice. I am satisfied the action the Council will take is sufficient to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman