Summary: Mr B complains about the way the Council dealt with a housing benefit overpayment. The Ombudsman finds the Council was at fault in failing to send a letter before action before issuing a direct earnings attachment to Mr B’s employer. It was also at fault in deleting recordings of telephone conversations which were the subject of a complaint by Mr B. The Council has agreed to apologise to Mr B and make a payment to him.

The complaint

1. Mr B complains about the way the Council dealt with a housing benefit overpayment.

Back to top

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)

Back to top

How I considered this complaint

4. I have considered the information provided by Mr B, made enquiries of the Council and considered its comments and the documents it provided.
5. I have written to Mr B and the Council with my draft decision and considered their comments.

Back to top

What I found

Legal and administrative background

6. The Welfare Reform Act 2012 supported by the Social Security (Overpayments and Recovery) Regulations 2013 introduced direct earnings attachments (DEAs) from April 2013. A DEA allows for recovery of overpaid benefit directly from a person’s earnings without having to apply via the court system.
7. The Government has issued the Housing Benefit Overpayment Guide 2015 for staff who deal with housing benefit overpayments for local authorities. The guide covers all aspects of housing benefit overpayments.

Key facts

8. In July 2017 the Council received updated earnings information for Mr B from HMRC. When the Council applied these changes, it created an overpayment of housing benefit for the period 5 December 2016 to 28 May 2017 totalling £960.68.
9. The Council issued Mr B with an invoice for this amount together with a standing order form for instalments of £50 per month. The first payment was due on 28 July 2017.
10. The Council received no contact from Mr B and issued a final notice on 25 August 2017. It Council issued a DEA to Mr B’s employer on 29 August 2017.
11. On 31 August 2017 Mr B telephoned the overpayment team and explained he thought the instalments were due to start on 28 September 2017, not 28 July 2017. Mr B paid £61 for the first two instalments so the Council cancelled the DEA. It wrote to Mr B on 4 September 2017 enclosing a standing order mandate and confirming instalments of £50 per month from 28 September 2017.
12. Mr B asked for the instalments to be changed to the 10th of each month. The Council agreed and Mr B paid £50 per month between October 2017 and March 2018.
13. In January and March 2018 Mr B contacted the Council stating the income information provided by HMRC was incorrect because his employer had been overpaying him during the period in question and he had to repay £3000. The Council requested evidence of this so it could review the overpayment decision. Mr B did not provide any evidence.
14. On 5 April 2018 Mr B telephoned the Council again saying that, because of the repayments he was making to his employer, he could not afford to pay £50 per month. He offered £10 per month. The Council told Mr B he should make the payment but it would send a statement of means form for him to complete before assessing whether this offer was acceptable.
15. The Council did not receive the completed statement of means so could not assess whether the lower repayment offer was acceptable. It issued a final demand on 9 May 2018.
16. Mr B telephoned the Council on 17 May 2018 explaining he had received the final demand but, as far as he was concerned, he had changed the instalment amount to £10 per month. The officer explained a statement of means form had been sent to him to be completed with his new offer. Mr B said he had not received it and said he had had some trouble with his post. The officer agreed to re-send the form. Mr B explained he had set up a standing order for £10 per month and the officer advised him to keep up these payments and return the form as soon as possible.
17. The Council sent a further statement of means to Mr B. He completed this and returned it on 16 July 2018 but did not specify the frequency of his payment offer. The Council sent an email to Mr B asking him to confirm whether the offer was weekly or monthly but did not receive a response.
18. In the meantime, Mr B continued to pay £10 per month.
19. On 7 August 2018 Mr B’s statement of means form was reviewed by a member of the overpayment team. Based on the fact that Mr B had been paying £10 per month the officer assumed this was the frequency he was proposing. The Council sent a letter and a standing order mandate to Mr B advising him that, based on the financial information he had provided, the minimum it was prepared to accept was £40 per month. The Council also issued a revised invoice detailing the instalments of £40 per month with an initial payment of £10 due on 23 August 2018. The letter stated, “Failure to maintain these repayments will result in the debt being recovered direct from your earnings without prior notice to yourself”.
20. The Council did not receive the payments as set out on the invoice and Mr B continued to pay £10 per month. So, the Council issued a final notice on 10 October 2018. The payments were not brought up to date and the Council did not receive any contact from Mr B. So, it sent a DEA to his employer on 29 October 2018.
21. On 2 November 2018 Mr B telephoned the Council complaining about the DEA. He said he had been paying £10 a month since June 2018 and had never received a letter declining this offer. The adviser’s notes of the telephone conversation state Mr B said he would make a formal complaint. He was unhappy that he could not talk to the overpayment team and that there was no contact name on any of the letters.
22. Mr B says he asked for an overpayments officer to return his call but the Council sent him an email instead.
23. Mr B telephoned the Council again and spoke to an adviser. He said an email was not an adequate response to a request for a call back.
24. Shortly afterwards an officer telephoned Mr B who explained he was not happy that the Council had written to his employer with a DEA. The officer explained the Council had asked him to clarify whether his offer of £10 was weekly or monthly but had not received a response and, as it had not received payments of £40 per month, it issued a DEA. Mr B said the Council had not contacted him to discuss why he was paying £10 per month instead of £40.
25. Mr B made a payment to clear the overpayment in full and the Council cancelled the DEA.
26. Mr B made a formal complaint the same day. The Council responded on 4 December 2018.
27. Mr B was dissatisfied with the Council’s response to his complaint and complained to the Ombudsman.

Analysis

Issuing a DEA without prior notification

28. The Council says it has not been its practice to write to customers in advance of a DEA being set up. However, this is currently under review with a recommendation that this will be done in future.
29. The Council says its policy is to follow the Housing Benefit Overpayment Guide 2015. The Guide states, “It is good practice to send an initial “Letter Before Action” to the debtor prior to any action being taken to initiate a DEA. This gives the debtor the opportunity to make payment arrangements outside of a DEA before the DEA is started”.
30. The Guide states that there are various reasons why it is considered good practice to adopt this approach including:
• it allows the claimant time to organise their finances in order for the recovery to commence. They may wish to make a full repayment, rather than having a weekly deduction;
• the claimant may want to come to some agreement, asking for a different method or recovery rate to be used;
• other debt recovery bodies follow these guidelines; and
• it is a person’s right to be able to query a debt and organise their finances before recovery commences.
31. Although the Guide states it is good practice to send an initial letter before action prior to initiating a DEA it does not require the Council to do this. However, as the Council says its policy is to follow the provisions of the Guide, I find it was at fault in failing to send a letter before action to Mr B in October 2018.
32. The Council’s letter of 7 August 2018 stated that, if Mr B did not pay £40 per month, it would recover the debt direct from his earnings without prior notice. I do not consider this letter is sufficient to comply with the Guide as it was sent nearly three months before the DEA was issued. In accordance with the Guide, it should have sent a letter before action to Mr B in October 2018 warning him that it was intending to issue a DEA.
33. Mr B says he did not receive the Council’s letter of 7 August 2018 or any other letters, invoices or reminders. I cannot reach a view on why Mr B did not receive the letters. However, they were correctly addressed and there is nothing to suggest they were not sent.
34. The Council’s failure to send a letter before action in October 2018 caused Mr B a significant injustice.

Telephone calls

35. Mr B says officers were abusive and dismissive towards him on several occasions when he telephoned. He says when he telephoned and offered to pay £10 per month in April 2018, the officer he spoke to was condescending and rude. She kept saying she would not make a decision that day as she had to leave but when he persisted she refused the offer and kept referring to having dealt with him before in relation to a council tax issue some time ago which was not relevant.
36. Mr B also says an adviser he spoke to on 2 November 2018 hung up on him after only a brief conversation. She also told him that an email was the same as a call back. The adviser’s notes of the conversation state, "He went on about the other call and the email, I felt that he was going over the same ground he started to become more aggressive I said I’d get a call back and ended the call”. Although I accept Mr B felt this was rude, the adviser was entitled to end the call if she felt they were going over the same ground and she agreed to get an officer to call Mr B to discuss the matter further.
37. Mr B says he then spoke to another adviser who misled him into believing a new payment plan could be arranged.
38. The Council has explained that Mr B spoke to Revenue and Benefits Contact Advisers on 2 November 2018. Their role is to take calls for the service and then direct queries to the relevant team to deal with.
39. I cannot reach a view on Mr B’s allegations about the way officers spoke to him during these telephone calls because the recordings of the conversations have been deleted. The advisers’ written notes of the conversations do not shed any light on these assertions.
40. The officer who responded to Mr B’s complaint at stage 1 of the Council’s complaints procedure said she had listened to the recordings but the stage 2 investigator was unable to do so because they had been deleted. Mr B says the recordings should have been retained pending the conclusion of his complaint.
41. It was clear from Mr B’s complaint that he was unhappy about the way in which officers spoke to him on 2 November 2018. He specifically asked for all telephone calls to be listened to.
42. The Council changed its policy on the retention of voice recordings to 30 days in July 2018 following the introduction of the new General Data Protection Regulations (GDPR). It says any recordings would have been deleted in line with this policy.
43. There are no grounds to criticise the Council for routinely deleting recordings in accordance with this timescale. However, where someone has made a formal complaint about officers’ conduct during specific telephone calls, the Council should retain the recordings pending the completion of its complaints procedure and for a reasonable time afterwards to allow the complainant to complain to the Ombudsman. In this case, the recordings were deleted between stage 1 and stage 2 of the Council’s complaints procedure. This was fault and causes Mr B a significant injustice as the Ombudsman cannot now reach a view on the content of those telephone conversations.

Delay in responding to Mr B’s complaint

44. Mr B made a formal complaint to the Council on 2 November 2018. The Council acknowledged the complaint on 6 November 2018 stating it would reply within 15 working days (27 November 2018).
45. Mr B telephoned the Council on 4 December 2018 asking to speak to the person who was dealing with his complaint as he had not received a response. The Council sent the stage 1 response to Mr B by email the same day.
46. Mr B responded the same day and the Council issued a stage 2 response on 12 December 2018.
47. I find the Council delayed in responding to Mr B’s complaint as the response was issued five days outside the 15 day timescale. I do not consider this delay caused Mr B a significant injustice so I do not intend to pursue this issue further.

Injustice

48. The Council’s failure to send a letter before action in October 2018 caused Mr B a significant injustice. If it had sent the letter, Mr B could have agreed to increase his payments or pay the remaining debt in full to avoid a DEA being issued to his employer. The Council’s failure to send the letter denied him this opportunity.
49. Deleting the recordings of the telephone calls also caused Mr B a significant injustice. There is uncertainty about what happened during those calls and Mr B has a justified anger that he has lost the opportunity for the evidence to be considered by the Ombudsman.

Agreed action

50. The Council has agreed that, within one month of the Ombudsman’s final decision, it will:
• apologise to Mr B for failing to send a letter before action in October 2018 and for deleting the recordings of the telephone conversations;
• pay Mr B £200 for the distress and inconvenience caused by failing to send a letter before action and the lost opportunity to avoid a DEA being issued to his employer; and
• pay Mr B £100 for the uncertainty caused by the deletion of the recordings and the lost opportunity for his complaint to be properly considered by the Ombudsman.

Back to top

Final decision

51. I find the Council was at fault in:
• failing to send a letter before action prior to issuing the DEA; and
• deleting recordings of telephone conversations which were the subject of Mr B’s ongoing complaint.
52. I have completed my investigation because the Council has agreed to implement the recommended remedy.

Back to top

Investigator's decision on behalf of the Ombudsman