Summary: The complainant says the Council added enforcement agent fees when he had paid his council tax. The Ombudsman finds the Council is at fault. The Council has agreed a suitable remedy.

The complaint

1. Mr X complains that the Council unfairly pursued recovery action for council tax arrears when he had paid his arrears in full. This led to enforcement agent fees which caused him distress and anxiety.

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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. I have considered the complaint and the copy correspondence provided by the complainant. I have made enquiries of the Council and considered the comments and documents the Council provided. I invited the complainant and the Council to comment on my draft decision.

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What I found

5. Mr X fell into council tax arrears in 2018 because he did not pay in accordance with the instalments that the Council had advised him in a bill sent in March 2018. The Council sent a reminder and then a summons in July 2018. The Council obtained a liability order in August 2018.
6. The Council sent Mr X a liability order notice in August 2018. This explained that if the council tax was not paid, or an arrangement made, the Council could take recovery action such as referring the account to its enforcement agent or seeking an attachment of earnings. The Council explained that if the debt was not paid, it could pass it to its enforcement agent. The agent who would charge a compliance fee of £75 when the Council referred it, and enforcement fees of £235 would be charged if the agents visited the property.
7. Mr X did not contact the Council or make an arrangement. However, he made monthly payments of around £60 from August to November 2018. The Council recognised Mr X could potentially clear the arrears by an instalment arrangement and so it sent a letter confirming an arrangement of £60 per month from 28 December 2018 to June 2019. The Council stated that if Mr X did not maintain the payments it would take recovery action without any further notification.
8. Mr X did not pay in accordance with the arrangement the Council had set. So on 31 January 2019 the Council passed the account to its enforcement agent. The agent added a compliance fee of £75. It sent Mr X an enforcement letter asking him to contact it and make payment or an arrangement of the outstanding £483. The agent sent a further letter reminding Mr X of the outstanding debt of £483 on 11 February 2019.
9. On 11 February 2019 Mr X paid £408 direct to the Council. This left £75 outstanding. The Council advised the agents of the payment. The agent then sent Mr X a letter confirming that £75 was outstanding and should be paid to the agent. It said that Mr X should pay this before 21 February, or it would take further recovery action.
10. Mr X emailed the Council on 17 February and said he was dissatisfied the Council had passed the account to its agents who had charged him £75. He said he had tried unsuccessfully to call the Council several times and had visited its offices but a security guard told him he probably would not be seen. He said he did speak to an officer and explained he was not working. He said he was waiting to hear from the Council. The Council has advised it has no record of this conversation.
11. Mr X sent the Council a further email on 18 February attaching evidence of when he had stopped working.
12. On 26 February 2019 the enforcement agent visited Mr X at 7.30 in the morning. The agent said there was no response and he left a notice confirming the visit and advising that Mr X contact the agent to make payment or it could return and take control of goods. The agent added a £235 enforcement fee. Mr X says the agent did not knock and just put a letter through his door.
13. Mr X emailed the Council on the same day and said that he had tried contacting the Council several times but now the enforcement agent had come to his door. He said the Council had not responded. Mr X also emailed the Council on 28 February and said that he had sent several emails which it had not replied to.
14. On Mr X called the Council on 25 March 2019 and complained about the charge of £310 for the enforcement agent delivering one letter to him. It appears the Council advised Mr X to put his complaint in writing even though he had already emailed the Council four times.
15. The Council says it responded to Mr X on 28 March 2019 stating that the Council expressed sympathy with his circumstances but that the agent’s fees were payable, and he should pay them. I have not seen the Council’s response. I have asked for a copy of this.
16. Mr X emailed the Council on 31 March expressing dissatisfaction with the Council’s response. He said he had not been told about any fees and the fees had been added after he had paid the full balance.
17. The enforcement agent visited Mr X’s home again on 2 April 2019, with no contact. It then sent him a committal notice on 3 May 2019 saying that the Council could seek his committal to prison or could pursue bankruptcy action for the debt.
18. Mr X complained to the enforcement agent and the Council on 3 May 2019 that the threatening letter he received about committal to prison was harassment. He repeated he had paid in full and that the agent had sent him a letter confirming he had paid in full. He said the first he heard from the agent was after he had paid.
19. The enforcement agent replied to Mr X’s complaint on 9 May 2019. It confirmed the £75 compliance fee had been added when the Council passed the account to it on 31 Jan 2019. It said it had stated the full amount payable was £483 on 1 February, and on 11 February. When Mr X had paid £408 directly to the Council the agent said it had written to advise him that there was still a balance of £75. As he had not paid by 21 February 2019, the agent had visited him on 26 February, and had added fees of £235. The agent said that in view of Mr X’s circumstances it could accept payments of £30 for 7 months with a final payment of £25.
20. Mr X complained to the Council on 9 May 2019. The Council replied on 23 May 2019 at stage one of its procedure. It explained in its view why the agent had added fees of £310. It said that £75 was added automatically by the agent when the Council referred the account to the agent. The agent’s letters of 1 and 11 February had advised him to make payment direct to the agent. When Mr X did not pay this by 21 February the agent visited adding £235 in fees. The Council said the agent had acted correctly in accordance with legislation. It said that Mr X had now accepted a payment arrangement of £30 per month.
21. Mr X complained at stage two of the Council procedure on 23 May 2019. He said the Council did not make hm aware of the £75 fee until after he paid and that he had not agreed to pay £30 per month.
22. The enforcement agent called Mr X on 12 June 2019. The agent recorded on its notes that it explained the compliance fee of £75 was part of the debt and it had written to Mr X on 1 February confirming the fee. It considered the fact that Mr X had paid immediately after indicated he had received the enforcement agent’s letters. The agent’s note of the call state that Mr X accepted he had received the agent’s letter and knew about the £75 fee. The notes recorded Mr X offered to pay £75 to settle the matter but the agent refused and said £310 was due.
23. The Council placed a hold on the enforcement agent’s action for two weeks and responded to Mr X’s complaint on 28 June 2019. It said that the Council had not sent him a letter specifically stating it would pass the debt to enforcement agents leading to a charge of £75 if he did not pay. But the Council said it did send him a letter in December 2018 which confirmed “failure to maintain payments as agreed will result in further recovery action being taken against you without any further notification.” The Council noted he did not believe the enforcement agent visited and gave details of the agent’s note regarding the visit. However, it said that even if Mr X had answered the door, the agent would still have charged £235. The Council did not uphold these complaints, but it accepted that that it had incorrectly stated he had accepted a £30 per month arrangement. It apologised for this.

Analysis

24. Based on the information I have seen I do not consider that there is fault by the Council regarding the agent’s £75 compliance fee. The Council had already advised in December 2018 that it would take further recovery action if Mr X did not keep to the arrangement. The Council had also sent a liability order notice in August 2018 which set out the enforcement agent fees that could be charged, including the £75 compliance fee. The fee is added at the point the agent receives the account, whether it takes any action or not. It appears that Mr X knew about the £75 charge as he accepted he did, in his telephone call to the agent in June.
25. I consider there was fault by the Council in not dealing with Mr X’s apparent complaint from 17 February 2019 until 28 March 2019. I consider the Council should have placed a hold on recovery action from 17 February preventing further agent’s charges being added. Mr X had sent two emails stating his dissatisfaction before the agent visited on 26 February, adding £235 fees. Mr X then sent a further two emails and called the Council before receiving a response. It does not appear the response of 28 March was adequate, or that the Council recognised that Mr X was making complaints. Mr X sent a further three emails and the agent visited again and then threatened committal action before the Council responded formally. It did not suspend recovery until 3 weeks after Mr X made a stage two complaint.
26. Recovery action by enforcement agents can progress at such a pace that it can lead to significant additional costs, as in this case. I consider that the Council should have registered Mr X’s complaint of 17 February 2019, suspended recovery and addressed any outstanding correspondence before allowing the agent to continue with recovery. Therefore, I consider the Council’s failure to respond between 17 February and 28 March and halt recovery action, was fault leading to injustice, as Mr X has additional costs of £235.
27. The agent sent Mr X a committal notice on 3 May which warned the Council could seek a warrant for his arrest or it could commence bankruptcy proceedings. However, I consider the Council could not commence bankruptcy proceedings as the threshold for proceedings is £5000. In addition, it does not appear the Council considered the matter properly before threatening potential committal proceedings. The threat of this action caused Mr X anxiety and distress.
28. The Council commented on my draft decision that its process says it should hold enforcement agent recovery if a customer contacts the Council. However, it says that the content of Mr X’s emails would not have led to it recalling the account and recovery would have continued, so the fee of £235 was correct. I have considered this and accept that if the Council had responded it would be unlikely that the account would be recalled. Nevertheless, the Council did not respond, and if it had paused recovery before it responded, this could have enabled Mr X to make an arrangement without incurring the fee of £235. The Council accepts it should have given further consideration to sending a committal notice, which caused distress, and it has agreed in view of this to remove the £235 fee.

Agreed action

29. I recommended the Council apologises and removes the costs of £235. The Council has agreed. If Mr X has paid the costs, the Council should refund these within one month of my decision, if there are no other outstanding arrears.

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Final decision

30. The Council has agreed a suitable remedy for the faults I identified. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman