Summary: Mr T says the Council took a direct debit payment from him for council tax when he had nothing left to pay, leaving him unable to buy essential goods. The Council accepts fault for its actions and has already offered a suitable remedy.

The complaint

1. Mr T says the Council;

• took a direct debit payment of £185.63 from him when he had already made a payment to clear the outstanding balance,
• left him overdrawn which resulted in bank charges of £31. He says he could not buy fuel, food or a prescription for the two days he was without the money, and
• treated him unfairly in the complaints process by asking for bank statements to prove financial hardship.

2. Mr T would like the Council to pay him £500 for the distress caused, and a further £31 for the bank charges he received.

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The Ombudsman’s role and powers

3. 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)
4. 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

5. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant,
• made enquiries of the Council and considered the comments and documents the Council provided,
• discussed the issues with the complainant, and
• sent my draft decision to both the Council and the complainant and considered any comments made in response.

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What I found

6. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way bailiffs may recover debts.
7. The council tax bill for the year is due on the 1st April. A council will usually collect payment through monthly instalments. If any instalment is missed the council will send the liable person a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
8. To use the various powers available to it to recover unpaid council tax, a council has to apply to the Magistrates Court for a liability order against those it believes are liable. Once a council has obtained a liability order it can take recovery action.
9. A liability order gives a council legal powers to take enforcement action to collect the money owed. This can include taking deductions from benefits, getting an attachment of earnings (by which deductions are taken directly from earnings by an employer and passed to the Council) or using bailiffs. The Council can decide which recovery method it wishes to use but it can only use one method for one liability order at one time.

What happened

10. Mr T failed to make council tax payments in line with the payment schedule. As a result, the Council started recovery action and sought a liability order. In November 2020, the Council sought an attachment of earnings order to recover the arrears from Mr T’s wages.
11. Mr T paid the outstanding balance of £755.00 directly to the Council on 23 November 2020.
12. On 25 November 2020, the Council took a further payment from Mr T of £185.63 via a direct debit instruction. Mr T had submitted a direct debit instruction form to the Council on 22 November 2020, which the Council said he should not have done. Mr T contacted the Council about this error and spoke to his bank, who returned the direct debit. Mr T says the transaction made him overdrawn and without money to buy fuel, food and a prescription. He says the money returned two business days later.
13. The Council said it took the payment via direct debit in error. In response to my enquiries, it said Mr T had completed two direct debit forms, one of which was incorrect. The Council said its automated system could not process the form, so it was passed to a member of staff to look at. The officer then made an error which resulted in the direct debit being taken. It said the officer concerned is no longer processing changes of this nature.
14. Mr T complained to the Council and asked it to pay him £200 for its error. The Council asked Mr T to provide bank statements as evidence of financial hardship he suffered because of the direct debit being taken. Mr T did not feel he should have to provide these and has not done so.
15. In his complaint to the Ombudsman, Mr T said the fact he struggled to pay the council tax bill for some time should provide the evidence of financial hardship.
16. The Council said Mr T provided a screenshot of a bank charge of £31, and while it did not contain specific information to directly attribute to this incident, it accepted it as evidence.
17. The Council offered to pay Mr T £31 for the bank charges and issued an apology. It would not consider any further payments without evidence of financial hardship. It says its position is because it has to use public money carefully.

Analysis

18. Mr T complains the Council took a direct debit payment even though he had already cleared the arrears on his council tax account and owed nothing. This action was fault which the Council acknowledges. As I have found fault, I have to consider how Mr T was affected as a direct result.
19. Mr T says the incident left him unable to buy essential goods and asked for a payment of £200 which increased to £500 when he complained to the Ombudsman. Mr T has not provided any evidence to show the financial hardship suffered.
20. The Council has offered to reimburse £31 for the bank charges incurred and requested evidence of financial hardship before considering any additional payment. A payment being taken incorrectly and returned two days later may affect people in different ways, depending on their financial situation. The Council does have to use public money carefully.
21. My view is it was appropriate for the Council to ask Mr T for evidence of the hardship its error caused him, before considering any additional remedy. As Mr T has chosen not to provide any further evidence, I do not find fault in the decision not to make a further payment.
22. Where the Council has accepted evidence in relation to bank charges, it has offered to reimburse the fee and it has also made an apology. In the absence of further evidence, this is a suitable remedy.
23. In response to the draft decision, the Council said it has already paid £31 to Mr T for the bank charges he received.

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Agreed action

24. The Council has already offered a suitable remedy of £31 for bank charges Mr T incurred and it has also made an apology. The error was specific to an individual who is no longer processing such changes, so I do not recommend any further remedies than those offered by the Council.

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Final decision

25. I uphold this complaint and issue a finding of fault against the Council for taking a council tax payment from Mr T, when no balance was due. The remedies offered by the Council are appropriate for the fault and subsequent injustice.

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Investigator's decision on behalf of the Ombudsman