Hammersmith and Fulham Council (202004933)

REPORT

COMPLAINT 202004933

Hammersmith and Fulham Council

19 April 2021

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

1.The resident complained about the landlord’s response to his complaint about the review of his former and current rent accounts. 

Background and summary of events

Background

2. Since November 2015 the resident has lived in a one bedroom first floor flat owned and managed by the landlord. Prior to this, he lived at two other addresses also owned by the landlord. His former rent accounts for these were in arrears. From 2017 the resident began making monthly payments to the landlord towards the arrears through a debt collection agency (‘the agency’). The resident was therefore making monthly arrears payments to the agency and monthly rent payments for his current address.

3. Previous complaint to the Ombudsman: In October 2019 the resident referred to the Ombudsman a complaint concerning his dispute with the landlord of his arrears on his current and two former rent accounts. With respect to the former accounts, he said that the landlord had failed to update its system with the payments taken by the agency and that as a result he had overpaid the arrears. With respect to his current account, he said that had been left in arrears when payments intended for his current account had been wrongly diverted by the landlord to his former account to repay the arrears.

4. The resident had formally complained about this to the landlord in March 2017. In January 2018 the landlord, in its final response, confirmed that it had reviewed the accounts and that the resident was up to date with his rent. The resident continued to make arrears payments via the agency and current rent payments to the landlord.

5. Under paragraph 39(d) of the Housing Ombudsman Scheme (previously paragraph 23(d)), the Ombudsman can only consider matters brought to its attention within 12 months of the complaint having exhausted the landlord’s complaint procedure. As the resident had not brought his complaint to the Ombudsman until October 2019 this was outside the timescale allowed for by the Scheme and so the Ombudsman had no jurisdiction to investigate. In informing the parties of its decision in April 2020, however, the Ombudsman recommended that the landlord consider the resident’s rent account and debt collection agency information and explain in writing for the resident its position regarding the overall arrears balance.

6. Further complaints: The resident currently has a separate complaint with the Ombudsman (Case Ref: 202007623) concerning a complaint of damp/mould at the property, and his application for a management transfer. Those matters do not form part of the Ombudsman’s consideration of this particular complaint.

Summary of events

7. In May 2019 the resident queried the arrears position directly with the debt collection agency (‘the agency’) which told him that the landlord had not been updating his former accounts with his arrears payments since 2018.

8. On 29 January 2020 the resident says the agency provided him with confirmation of the settlement of his two former accounts as no arrears remained outstanding.

9. Stage 1 complaint: On 2 February 2020 the landlord received the resident’s formal complaint to which he attached the agency’s confirmation of settlement. He asked why his accounts were still showing in arrears when he had paid these off. He detailed the payments he had made and questioned why since March 2018 the landlord had failed to take these payments via the agency into account and update its records, forcing him to continue making payments via the agency beyond the point at which they were due. As a result he said he had repaid the same arrears several times over.  He sought an investigation from the landlord into why the accounts had not been updated since March 2018 and requested a refund from the landlord of the resulting overpayment.

10. Stage 1 response: On 28 February 2020 the landlord replied. [Under its complaints policy it aims to respond within 15 working days.] It explained that the arrears had comprised three direct debit payments made by the resident in June, September and December 2015 which were not taken at the time due to a system error. The landlord explained that this had been caused by a move at that time to an new finance system during which time payments failed to be taken. The landlord said if the resident could prove he had made the payments in question it would reconsider. The landlord also said it would arrange to link all the resident’s accounts so all payments could come under the one account. It said it would ask the agency to withhold all recovery action.

11. Stage 2 request: The resident replied on 2 March 2020 requesting a review of his complaint. He said he was confused by the landlord’s explanation of the position. He said that if the landlord had acknowledged arrears had been recovered, it should have closed the accounts. He was worried about the linking of the accounts if the landlord still considered him to be in arrears. He did not understand the landlord’s position when he had provided the landlord with the agency’s confirmation that arrears had been cleared. He also did not understand why the landlord was saying it would ask the agency to withhold recovery action when his accounts with the agency were now settled.

12. The resident questioned why he should provide proof of payments when it was the landlord who had the contract with the agency and he was concerned that arrears showing on his current account had arisen because the landlord had routed his current rent payments to his arrears accounts. He attached the confirmation of account settlement from the agency and proof of payments which were not reflected in the figures cited by the landlord in its response. The resident asked the landlord to update its records, close his two former accounts and update his current account.

13. In April 2020 the Ombudsman recommended that the landlord review the accounts and explain to the resident the overall arrears balance. During May 2020 it seems the landlord adjusted the former accounts. On one it appears it had failed to update it to take account of two payments in April and May 2019 which, once adjusted for these, resulted in a nil balance. On the other arrears account it identified a credit which if verified could be moved to the resident’s current account which was in arrears, leaving a nil balance on the arrears account.

14. Stage 2 response: On 21 May 2020 the landlord replied to the resident. [Under its complaints policy it aims to respond within 20 working days.] It said it had actioned his request to update his two former accounts and they both now showed a nil balance. With respect to his current account it said it had identified that payments for his former account had been included, but that this had now been adjusted and a credit moved to his current account.

15. Further enquiries: On 3 June 2020 the resident replied to the landlord. He said he welcomed the review of the account although he was unable to access the accounts online to check the calculations. He also questioned why his current account was showing a fluctuating balance from arrears to credit over the past two months. The resident followed this on 1 July 2020 with a further query as to the level of credit of his current account, requesting an explanation of its calculations. On 3 August 2020 he chased the landlord for a response, reiterating his query concerning the level of credit that was showing on his account, the fluctuations from credit to arrears, and the fact that he could still not access his online account. He asked for copies of his account statements for previous months.

16. On 11 August the landlord replied, informing the resident that as of 10 August 2020 his current account, following adjustments, was showing a credit. It said it would forward the statement and that the resident should get back in touch once he had seen it.

Assessment and findings

18. In coming to the Ombudsman the resident has said that despite the landlord’s Stage 2 response, he still found the accounts confusing; his current account was still inaccurate; his request for monthly statements and clarification had been ignored; he maintained he had overpaid and required a refund; and that he wanted a full audit of his rent accounts.

19. It is not the role of the Ombudsman to audit the resident’s accounts, including an assessment of the accuracy of ongoing payments to his current account. The landlord has provided him with an explanation for the balance of his respective accounts following its review of those accounts. The Ombudsman has therefore considered his complaint that this explanation does not adequately resolve the confusion caused by the previous error, the resulting arrears inaccuracies and the landlord’s previous explanations for this.

20. The Ombudsman has therefore considered the explanations provided by the landlord and in the course of doing so has made some further enquiries of the landlord in order to better understand those explanations. As a result the Ombudsman’s assessment is that the position as relayed by the landlord in its Stage 2 response is an accurate representation of the position shown in the available evidence, for the following reasons.

21. The resident claims, partly it seems as a result of what he was told by the agency, that since March 2018 the landlord had been failing to update its records with arrears payments from the agency and that as a result he had continued to make arrears beyond the point they were due. The landlord has accepted that there was a system failure on its part which led to its failure to update accounts with payments via the agency.

22. So while it is accepted the resident did continue making payments after the arrears were due, the landlord has explained that all arrears payments that it received either direct or via the agency have now been allocated to the former accounts and that any arrears payments made after they were due were subsequently allocated to his current account by adjustment as follows:

• Account 10329404 – Arrears £281.22 cleared.

• Account 10043209 –Arrears £1,328.40 cleared.

• Account 10023313 – Current account currently £336.64 in credit.

23. It would appear some confusion was caused by the reference in the landlord’s Stage 1 response to the accounts remaining in arrears but also that it would ask the agency to withhold recovery action. In response to the Ombudsman’s enquiries, the landlord has explained that at the time of its Stage 1 response the rent accounts were in arrears but only because it still needed at that point to reconcile the payments the resident had made via the agency. And that it had said it would ask the agency to withhold recovery action in order to reassure the resident that no further action would be taken whilst payments were being reconciled; which they eventually were.

24. But in the Ombudsman’s view, this clear explanation was not the one given by the landlord in its Stage 1 response. That explanation did not explain as above, but referred to direct debits having not been taken and asking the resident to evidence that they had. That explanation gave the impression that the resident had not in fact made the payments he was saying he had made, hence his understandable confusion.

25. In the Ombudsman’s view, an already potentially confusing payment scenario for the resident was exacerbated by the landlord’s failure initially to adequately explain the situation that had arisen as a result of the earlier system failure on its part. That system failure had resulted in arrears payments being made through the agency not being picked up in a timely manner which led to the resident making arrears payments beyond the point they were due. This understandably, albeit mistakenly, led the resident to consider he had overpaid arrears which ought then to be refunded. Consequently, the landlord’s Stage 1 response, rather than resolve the confusion caused by its system error, only succeeded in further confusing the picture for the resident.

26. It was this confusion that needed resolving in the landlord’s Stage 2 response. While subsequent reviews of the accounts by the landlord and its explanation in its Stage 2 response subsequently have helped clarify the position, its considerably delayed Stage 2 response – taking over 10 weeks as opposed to its target timescale of 20 working days – clearly compounded the resident’s frustration. Furthermore, in light of the resident’s detailed review request and remaining confusion surrounding the accounts, the Ombudsman considers the resident was entitled to a more comprehensive explanation of what had occurred and why.

27. The Stage 2 response confirmed the accurate up to date position in relation to the accounts, which the resident accepted at that time, but it failed to address the confusion caused by its Stage 1 response to which the resident had wanted further information. Its failure to more comprehensively address these points in its reply and then its failure to respond to the resident’s account queries through June and July 2020 would not have helped improve the resident’s confidence in the landlord’s handling of the accounts.

28. In summary, while the Ombudsman welcomes the explanations that have now been given by the landlord, as together they provide a reasonable explanation of the position, these explanations ought to have been provided sooner and, as a matter of course, in response to the resident’s complaint in February 2020. The delay in providing these explanations and the reassurance the resident sought regarding the accuracy of his accounts has been a clear and understandable cause of frustration and inconvenience for the resident.

29. Finally, in light of the resident’s ongoing queries in relation to his current rent account (and for any remaining ones he might have in relation to his former accounts) the Ombudsman welcomes the landlord’s explanation that the resident can access and view his accounts online (through ‘My Account’). In addition, the landlord’s rent income team manager has also told the Ombudsman that he is happy to clarify for the resident any payments he is unable to reconcile and to check and confirm with him to which account each payment has been posted to and when. The Ombudsman considers that to be a fair response from the landlord to any remaining issues the resident might have with regard to his accounts.

Determination (decision)

30. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the landlord in its response to the resident’s complaint about the review of his former and current rent accounts. 

Reasons

31. In addressing the resident’s complaint about the review of his former and current rent accounts the landlord failed to provide a clear and timely explanation for its actions and the resulting balances of his accounts, resulting in confusion for the resident and the need for him to seek further clarification.

Orders

32. Within four weeks of the date of this determination the landlord is ordered to make the resident a payment of £200 compensation for the failings identified in its complaint response.

Recommendation

33. In light of the system failure which impacted the resident’s account, it is recommended that the landlord assure itself that this failure did not similarly impact the accounts of any of its other residents.