Summary: Miss R complained the Council made errors when it allocated her payments to her council tax account, which led to debt recovery action. As a result, Miss R said she experienced distress, uncertainty and had time and trouble to bring her concerns to the Council’s attention. We found the Council caused an error, which led to the involvement of enforcement agents. It agreed to apologise to Miss R and make a payment to acknowledge the injustice this caused her.

The complaint

1. The complainant, whom I shall refer to as Miss R, complained the Council made errors when it allocated her payments to her council tax account, which led to debt recovery action from the Council’s enforcement agent.
2. As a result, Mrs R said she experienced distress and had time and trouble to get the Council to resolve its errors.

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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 an organisation’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 my investigation, I have considered Miss R’s complaint and the Council’s responses. I also discussed the complaint with Miss R and considered the information she shared with me.
6. Miss R and the Council had an opportunity to comment on my draft decision. I have considered the comments I received before making a final decision.

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What I found

Council tax

7. 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.
8. 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).
9. To use the various powers available to it to recover unpaid council tax, a council must 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.
10. The Council’s website says, if someone receives a summons or liability order, to avoid further recovery action and fees, they should contact the Council to make a payment arrangement or complete its Statement of Means form.
11. A liability order gives councils 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.
12. Bailiffs (also referred to as enforcement agents) charge fees which also must be paid. The Council’s website says individuals should not ignore the summons or liability order as it will send an enforcement agent to collect the debt.
13. 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.
14. There is no definition of ‘vulnerable debtors’ in the law or government guidance. The law and guidance do not say debts may not be recovered from vulnerable debtors, but that such cases once identified should be handled with care.

What happened

15. Miss R lives in the Council’s area and is liable for paying council tax charges. She has been diagnosed with a terminal illness which has also impacted her mental health.
16. In late 2021 Miss R was in arrears with her 2021/2022 council tax bill. She also had some arrears on previous years council tax bills, which she had a repayment plan for.
17. Miss R contacted the Council and agreed a repayment plan for her 2021/2022 council tax arrears. She made payments as agreed for December 2021 and January 2022.
18. In January 2022, Miss R received letters from the Council which said she had failed to pay the agreed repayment instalments.
19. Miss R said she called the Council several times to dispute this as she had made the agreed payments. She said the Council told her there had been an issue with the barcode on her Council tax bills, so her payments had been misplaced.
20. Miss R started to receive letters from the Council’s enforcement agent for failing to pay the agreed council tax instalments. She contacted the enforcement agent but was told she would have to dispute the debt directly with the Council.
21. Miss R said the bailiff letters caused her distress as she had made council tax payments as agreed with the Council. So, she complained to the Council.
22. In response, the Council told Miss R there had been an issue with its system and the bar code on her bills, so her payments had not been allocated to her council tax account. However, it did not uphold her complaint as it had:
• placed her account on hold until its finance team could transfer the payment to her council tax account;
• recalled the debt from its enforcement agent but this process would take 15 working days; and
• reissued its bills to Miss R with the correct barcode
23. Miss R said she had since received further demand letters from the Council’s enforcement agent.
24. In March 2022, the Council located Miss R payments and told her it would transfer this to her council tax account.
25. Miss R was unhappy with the Council’s response and her payments were still not showing on her council tax account, so she asked the Council to consider her complaint under stage two of its complaints process.
26. In April 2022 the Council provided its final response to Miss R. It did not uphold her complaint. It said it had already told her the issue occurred due to a system issue and her payments had since been located and allocated to her account.
27. Miss R asked the Ombudsman to investigate as she is unhappy with how the Council handled its errors and her complaint.

Analysis

28. I have seen no good reason why the Council did not uphold Miss R’s complaint. This is because it has confirmed Miss R made the agreed payments toward her council tax repayment plans. But due to an error in the barcode on the bills the Council sent to her, her payments were allocated incorrectly in its system. This meant her account went into arrears again, and the Council passed her case to its enforcement agent.
29. I found the error was caused by the Council. It was therefore at fault for misplacing Miss R’s payments. It should also have upheld her complaint, as it agreed it was the Council’s error which caused the payment issue and led to the involvement of its enforcement agent.
30. I acknowledge the Council has rectified the issue by locating Miss R’s payments and allocating these to her council tax account, and it put recovery on her account on hold. She was therefore not charged any additional costs as a result of its errors.
31. However, I am satisfied Miss R experienced some distress due to the uncertainty the misplaced payments caused her, and the Council’s enforcement agents’ letters which warned her with further action and costs. She also had some time and trouble to contact the Council and its enforcement agent to dispute the Council’s error.
32. While Miss R may not be classed as vulnerable by the Council, I acknowledge the impact on her may have been greater due to her terminal illness and her mental health.

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Agreed action

33. To remedy the injustice the Council caused to Miss R, the Council should, within one month of the final decision:
1. apologise in writing to Miss R and pay her £150 to acknowledge the distress and uncertainty she experienced as a result of the Council’s error. Including, the time and trouble she had to bring her concerns to its attention.
34. Within three months of the final decision the Council should also:
1.  
2. remind its officers of its manual process to suspend recovery action with its enforcement agent. This is to ensure no further demand letters are sent to customers after the recovery process has been put on hold, in particular in circumstances where the Council finds it was responsible for an error.

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Final decision

35. I have completed my investigation with a finding of fault, which caused an injustice.

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Investigator's decision on behalf of the Ombudsman