One Housing Group Limited (202002660)

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REPORT

COMPLAINT 202002660

One Housing Group Limited

17 May 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 complaint is about:

a)     The administration of the resident’s rent account, and;

b)     the complaints process.

Background and summary of events

Background

  1. The rent ‘statement of account’ indicates that the resident’s tenancy began on 25 March 2013 at which time her rent was £151.58 per week, and Housing Benefit (HB) was paid at a rate of £300.92 every two weeks.
  2. The HB left a shortfall of £2.24 per fortnight which was paid by the resident, leaving a static balance of approximately £150, equal to two weeks rent, HB being paid in arrears.
  3. The arrears figure then fluctuated considerably in 2014, when the rent increased to £157.26 per week, but HB payments and the resident’s contribution stayed the same, leaving a shortfall of £11.35 per week. There is no evidence that notification was given to the tenant of this increase or their contribution.
  4. In 2015, the rent account shows the rent reduced slightly to £157.11, but HB remained the same and the resident contributed £3.10 per fortnight. This created a shortfall of £10.20 per week.
  5. In 2016, the rent reduced to £155.54 per week, and HB increased to £311.08, the full gross rent payable to the landlord. For the first time, no service charge was deducted: As the resident was on full HB throughout her tenancy, but some service charges are not covered by HB, this implies that ineligible charges were no longer included in the resident’s gross rent from April 2016, and HB then paid the full rent payable to the landlord.
  6. However, the resident continued to pay £3.10, increasing this in August 2016 following the landlord issuing a notice of seeking possession letter on 12 July 2016, due to the accumulated arrears from the last two years when there was a HB shortfall. There is no evidence of the notification of the rent increase or why the ineligible service charges were no longer ineligible.
  7. The landlord’s records show that the resident first contacted the landlord on        3 August 2016 to say she was unhappy with the explanation of her arrears (the static arrears at that time being approximately £540). She then made two lump sum payments totalling £304.03 and began making increased fortnightly payments to the rent account.
  8. In 2017, the ‘annual service charge and rent review’ reduced the weekly rent to £153.98, to include a service charge of £15.53. HB paid this sum in full, and the resident stopped making contributions.
  9. In 2018 the rent reduced again to £152.44 gross, including £11.22 service charge, and in 2019 the rent account indicates the gross rent was £150.92, being met in full by HB. The landlord has not provided the breakdown of this sum.
  10. The annual rent review for 2020 and 2021 did not include a specified sum for service charge.
  11. Following the issue of a rent arrears notice, the resident emailed the landlord on 16 June 2019 to explain that the HB department had confirmed that benefit had been paid continuously and the landlord should contact the HB office to discuss matters further if needs be. 
  12. The landlord’s ‘Customer Service Offer’ (page 5, not provided by the landlord but online) sets out a standard that it aims to deliver, and that it will ‘have well trained and knowledgeable staff to deal with your queries’ and ‘be clear in our communication with you’. The ‘Customer Service offer’ (page 14) says that the landlord will ‘talk directly with staff in local authority Housing Benefit departments on your behalf’.
  13. The Complaints Resolution and Compliments Policy (February 2020) provided by the landlord says it will respond in 15 days.

 

 

Summary of events

  1. On 12 May 2020, an internal ‘concern escalation form’ details that the resident had raised the issue of a discrepancy on the rent account and that resident felt the Customer Accounts Advisor (CAA) had messed up the account and required an investigation.
  2. On 9 June, the CAA issued a rent statement to the resident for her to forward to HB. The tenant called the same day and said that HB had advised that full HB was being paid. However, on 18 June 2020, the landlord issued an arrears letter and said that the account was overdue with rent arrears of £1,008.95.
  3. The resident emailed the landlord on 29 June 2020 and enclosed a letter from the local authority (LA) regarding her HB which confirmed that full benefit had been paid since 2013, that HB was currently paying £154.99 according to the last increase letter, and that no service charge had been highlighted separately in the letter. The resident said she had all the rent statements and increase letters since 2013 and asked if the landlord had outlined the service charge separately to the rent. The letter from the LA showed full HB had been paid for the resident effective 25 March 2013 in accordance with the rental costs they had been advised of. The resident raised the issue of service charges being the cause of the arrears.
  4. The HB schedule for the period 3 June 2019 to 26 July 2020 showed HB of £301.84 paid twice weekly from 3 June 2019 to 5 April 2020 and £309.98 paid twice weekly from 6 April 2020 to 26 July 2020. 
  5. A statement of account issued to the resident on 30 June 2020 showed arrears of £1,008.95 and included charges and credits of £11.23 being applied to the account (and therefore offsetting each other) throughout the period 6 January 2020 to 29 June 2020, with rent of £154.99 (service charges nil) and full HB of £309.98 per fortnight.  
  6. An email from the resident dated 30 June 2020 attached her previous email of 2 October 2018 and said she had no response to this or her email dated 14 June 2019 regarding arrears, and that the arrears were not due to HB but a discrepancy with the rent account. The resident asked if the landlord could look again.
  7. The CAA responded the same day to say that there had been a ‘few discussions’ since these emails and the issue addressed, and there seemed to be ‘a couple of missing payments by housing benefit. Please get them to address this’. An internal email on 3 July 2020 from the CAA to others said that the resident wanted the issue dealt with formally.
  8. On 6 July 2020, this Service wrote to the landlord having been contacted by the resident and said that the resident’s complaint was about the administration of her rent account, that the landlord suggested she was in arrears when she was not, and that she had made a formal complaint but had not received a response.  The landlord responded on 8 July 2020 saying that the issue was being investigated and it would reply by 27 July 2020.
  9. An internal email on 13 July 2020 showed the finance team were asked to investigate two missing HB payments relating to June and July 2019, and the finance team replied that the payments had been located and posted to the rent account. The CAA asked for the reason and the Senior Rent Finance Officer explained that this was due to an overpayment for another tenant.
  10. On 17 July 2020, the resident emailed the landlord to ask for a response in writing.  The landlord did so on 20 July 2020, when its Customer Accounts Manager (CAM) confirmed that on 14 June 2019 the resident emailed the CAA to say there should not be arrears on her account as HB was in payment. Notes on the landlord’s systems indicated that a telephone conversation took place but not that the missing payment was identified. The CAA had contacted the HB dept to find why there were gaps in payments but did not keep the resident informed. The finance department finally located two sums in the landlord’s ‘suspense account’ – £301.84 for the period 20 May to 2 June 2019 and the same for 15 July to 28 July 2019.
  11. The amounts had not been applied to the resident’s rent account as HB had offset it against money owed back in relation to another tenant of the landlord, without notifying the landlord, and it had only come to light following a thorough audit of the rent account.  Once the sums were applied to the rent account the account returned to a balance of £95.29 arrears, due to the HB being paid a week in arrears and rent being due, as per General Terms of the tenancy agreement, section 1 (2), in advance on Monday each week.  The landlord said it was the resident’s responsibility to make up any difference so that the rent account was not in arrears in accordance with the agreement.
  12. Accordingly, the landlord said that the complaint was upheld, lessons had been learnt from the handling of the matter, the account adviser had been briefed on the importance of ‘providing excellent customer service that leads to good customer experience’ and that the landlord would improve its relationship with the HB department, so it is notified on resident’s overpayments to guide against ‘random deductions from those that do not owe’.
  13. The CAM asked that she be copied into all emails going forward to ensure communication was maintained and offered £50 compensation for the time and trouble, which would be applied to the rent account. Further appeal rights were given to the Designated Person and this Service.
  14. On 30 July 2020, the LA provided statements to the resident for HB paid from 14 January 2019 to 26 July 2020 and confirmed that full HB had been paid throughout the period.
  15. On 11 September 2020, the resident emailed the landlord to ask for an ‘official stage three’ response and on 16 September 2020 the CAM emailed the resident enclosing a further complaint reply. The CAM said the landlord had reviewed the resident’s concerns and noted that an account advisor called her on 9 August 2016 to advise that her arrears were £695.11. As a result, a face-to-face meeting was held in the office when the resident made a payment plan which she adhered to, and arrears fell back to under one week’s rent. The landlord confirmed that the current arrears would be paid by HB if the claim were to end.
  16. The CAM apologised for not making it clearer that it did not offer a stage two complaint stage, but it had steps to enable it to find a resolution at an earlier stage. In this case, the CAA and the CAM had contacted the resident to deal with the issues raised. The landlord referred to its complaints resolution policy and that the response of 20 July 2020 signposted her to the Ombudsman. As a result of the investigation the landlord admitted there had been service failures and apologised unreservedly. It also offered a second £50 compensation as a goodwill gesture and put measures in place including training for the accounts advisor and building a better relationship with the HB department.
  17. The landlord also said that in line with new guidance issued by the Ombudsman, it was reviewing its existing single stage complaints resolution policy.  Appeal rights to a designated person and this Service were provided.
  18. The resident replied to the complaint, noted that the landlord had accepted in its complaint response that it could have communicated its complaints process better, and asked for the bank transfer slip to be posted to her so the money could go into her bank account.
  19. The resident emailed the landlord to ask for a current rent account statement on 17 September 2020 and asked that it identify any static rent arrears. She advised that the LA had been helpful and if the landlord could send a rent account she could check with them.
  20. The CAM replied that the compensation slip had been posted and advised that the rent statement arrears balance for week commencing 14 September 2020 was higher than the static balance as HB had not yet been applied to the rent account, and that the amount of £95.29 had been static since 13 July 2020.
  21. A ‘rent statement’ issued on 17 September 2020 showed a balance of £353.40 credit. A ‘statement of account’ also for this day showed a balance of £560.26 arrears.
  22. The resident then emailed the landlord on 21 September 2020, she had received the rent statement but not the compensation slip and wanted the payment by cheque. The landlord responded that as two or three directors needed to sign the cheque and they are working at home due to the Covid-19 pandemic, a bank transfer would be easier and quicker. The resident replied that she would post the slip back once it arrived.
  23. An email from the resident to the landlord on 28 September 2020 points to the inconsistencies in the statements issued 17 September and asked for a correct statement to be sent.
  24. On 29 September 2020, the landlord emailed the resident and said that the IT department was investigating the discrepancies and as at week ending 21 September 2020, the rent account had a static balance of £95.29.
  25. The same day the resident emailed this Service and said that she had experienced rent arrears since 2018 and had tried to work with the landlord, the LA had investigated the HB and she had re-sent an email to the landlord on 29 June 2020 which she had sent the year before on 14 June 2019 regarding the rent arrears, and the arrears were not because of HB but a discrepancy on the landlord’s bank account.  She said the landlord did not reply to her enquiries of 2 October 2018 and 14 June 2019. She had approached this Service due to the landlord not wanting her to go through its complaints process. Whilst the landlord did then respond it had still not provided a copy of her corrected rent account.
  26. On 21 September 2020, the resident received a rent account statement showing a credit of £353.40 effective 31 August 2020, and on 24 September 2020 another with an arrears balance of £560.26 effective 17 September 2020.  The HB department had listed payments made to the landlord in August and September 2020. The resident was concerned that the ‘static’ arrears were inconsistent, being quoted as being £95.29 and £91.22 and HB had confirmed that from 2013 to date the full HB had been paid. The matter was not resolved, although the resident had emailed her accounts advisor and the CAM on 28 September 2020, and the resident requested that the Ombudsman intervene.
  27. The CAA emailed the resident on 8 October 2020 and advised that the landlord’s IT department had identified that there had been a ‘technical glitch’ on some quarterly statements, but the last rent statement attached, and previously sent by the CAA, were accurate. Apologies for any inconvenience were given.
  28. On 20 January 2021, a letter from the CAA to the resident enclosed a statement of account and noted that there seemed to be a HB payment missing and asked the resident if there had been a change in her circumstances. The statement of account showed a balance of £560.26 in arrears. 
  29. In February 2021, the resident told this Service that she felt the sum of £600 she paid in 2016 was wrong, that HB was paid continually, and that the landlord was ‘doctoring account on purpose’.
  30. The resident contacted this Service enclosing an email from the LA confirming full HB from 14 January 2019 to 26 July 2020 and receipts for payments made at the Post Office by the resident between 26 September 2016 and 15 January 2017 totalling £107.90. She said the LA were not advised of increases in rent and service charge after she moved to her current address in 2013. The resident said she had made a payment of £200 towards arrears on 16 August 2016 and the landlord said that left a balance of £180.93. The landlord was happy at that time and said she did not need to set up a payment plan. The same day the resident paid £104.03 and between September 2016 and January 2017 she paid the rest off via Allpay. However, the £104.30 and the other sums did not appear on the rent account.
  31. The resident said that from 2020 the CAA included the service charge in the rent statement to make it appear that the arrears were due to this, when previously from 2017, HB were paying both rent and service charge. The resident felt the CAA and CAM had been doctoring her account, and that this has caused resident’s long term mental health to deteriorate.  The resident said that she wanted to know the actual period of the time the rent arrears appeared. 
  32. A ‘statement of account’ dated 12 March 2021 shows arrears of £95.29. The resident emailed this Service to ask how the arrears of £95.29 accrued when the rent is £154.99 and given previous claim by landlord that static arrears were £91.22 as of 24 April 2019 and that £180.93 of the payments made by the resident in 2016 are not showing on any statements. 
  33. On 29 March 2021, the resident emailed this Service and advised that she has had conflicting rent statements from beginning to end despite HB confirming full benefit with no breaks, that the landlord was unable to confirm where the arrears come from, and payments made by her in 2016 were not on the rent the account. Further she said that the landlord had refused to pay her compensation by cheque.  
  34. The landlord responded to this Service on 27 April 2021 referencing the issue with the HB that had been offset to pay another tenant’s overpayment, the ‘system glitch’ that caused inaccurate balances, and IT issues in September 2020 leading to a statement being sent with the wrong balance. 
  35. The landlord stated there were no arrears on the account, the sum of £97.61 showing was due to HB paying in arrears.

 

Assessment and findings

The administration of the resident’s rent account

  1. There have been arrears on the resident’s rent account almost constantly since the tenancy began in 2013 and the landlord has given various reasons for this, most recently saying this was because HB is paid in arrears.
  2. While this is correct, this does not explain the complicated history of the account. It seems that the resident (and possibly the HB dept) has not always had the correct information about ineligible charges, which may explain why the resident was not paying the correct sum at the start of the tenancy.
  3. It has not been shown what notices were given to the resident regarding the rent and service charges from the start of her tenancy, but from the evidence provided, ineligible service charges (not eligible for HB) were charged in financial years beginning April 2013, 2014 and 2015. The resident paid the shortfall promptly during this time, but at the 2013 rate. In 2014 and 2015 there was a shortfall of £11.35 and £10.20 per week respectively, due to an increase in the ineligible service change, although no breakdown has been provided for this.
  4. In 2016, the ineligible service charge element seemed to be removed from the rent and HB met the rent in full, but the resident was still making fortnightly payments to the rent account of £3.10.
  5. In 2017 a service charge was in evidence but for HB eligible communal services, and again HB met the charge in full. The resident then stopped paying a contribution.
  6. The explanations given for the arrears on the account have varied and the landlord has asked the resident to enquire with the HB office several times when this was not the reason for her arrears, which were due to the resident not paying the correct shortfall in her weekly rent in 2014 – 2015. There is no evidence that she was aware of the correct sum at the time, or that she has been told this since.
  7. There was an issue with a HB overpayment for another tenant being deducted from the resident’s payment in June and July 2019, and this was eventually resolved in July 2020, and the landlord has accepted that its working relationship with the LA does need to improve. On two other occasions the wrong balances were given on the rent account which was subsequently explained in October 2020 as being due to a ‘technical glitch’. 
  8. While the landlord’s Income and Collection Policy (not provided but online) section 4.3 says recovery action will not be taken for arrears less than one week/month, arrears letters right up to a notice of seeking possession warning letter were issued in 2016 when the arrears balance on the account was incorrect. The arrears are clearly a concern, and the resident has been asking for a clear explanation for the fluctuating arrears figures for several years.
  9. The payments which the resident has provided receipts for in 2016 are all present on the rent statement provided by the landlord, but this was not explained to the resident.
  10. It would seem from the evidence provided that the arrears on the rent account have resulted from the shortfall in the years 2014 and 2015 when there were ineligible service charges included in the rent which were not met by HB. There has been no evidence provided to confirm this other than the amounts shown for rent and HB on the rent account, and without knowing what information was given to the HB department at that time, it is not possible to know if any error was made by them in this respect.
  11. As shown on the rent account, the resident regularly made her fortnightly payments at the correct rate in 2013 which continued in 2014 and 2015, when they should have been higher. Internal landlord notes do not show that this was ever discussed with the resident or given as an explanation for the arrears, only that she was told to contact the HB department.
  12. It is therefore reasonable to assume that had the resident been aware of the change in the service charge, she would have paid the sums due at the time. These shortfalls over two years were the reason she then was asked to pay a lump sum followed by increased fortnightly payments to the rent account in 2016, even though the ineligible service charge was no longer being charged.
  13. Due to the rent decreasing on 1 April 2019, and HB being paid in arrears on 8 April, the static rent arrears figure went from £92.74 on 25 March 2019 to £89.70 on 8 April 2019 and to £91.22 on 24 April 2019. This changed again when the rent went up on 6 April 2020, when the static arrears (after the two missing HB payments were credited to the account) changed again to £95.29. The resident had asked for the changing static arrears figure to be explained but this has never happened.
  14. The resident was told in the landlord’s complaint response of 20 July 2020 that HB was paid one week in arears, when it is paid two-weekly in arrears.
  15. Given the history of the account, the £100 compensation already offered is not sufficient. After the final response was issued, the landlord sent conflicting rent account statements again, and it has yet to adequately explain the history of the rent arrears to the resident, or the fluctuations in the static arrears explained above. The emails sent to this Service after the landlord’s internal complaints procedure had ended illustrate that the resident was not reassured by the landlord’s complaint responses.  
  16. Although the landlord’s ‘Compensation and Other Payments Policy issued 2010’, does discuss compensation as a gesture of goodwill, no sums are quoted. The Ombudsman’s own guidance on remedies recommends awards starting at £250 where a complainant has had to repeatedly chase responses and the correction of mistakes, and where there is a failure to signpost the complainant. It is noted that after the problems in 2016, no recovery action higher than a first arrears letter has been issued, so an award of £250 would seem fair in all the circumstances.  

The complaints process

  1. The complaint was not fully investigated internally, and although the CAM said that the CAA was aware of her responsibilities, it does not seem that staff with the correct understanding of the account were involved in assisting the resident and take ownership of the issue, even after the complaint was made.
  2. The landlord was not supportive and did not take ownership of the complaint at an early stage when it could have reviewed the account and found the explanation for the arrears.

Determination (decision)

  1. In accordance with paragraph 54 of the Scheme, there was service failure by the landlord in relation to:
    1. The administration of the resident’s rent account, and;
    2. the complaints process.

Reasons

  1. The landlord had a responsibility to assist the resident with her enquiry concerning her arrears, it repeatedly failed to do this and sent her to the LA when the problem lay with the shortfall the resident was due to contribute to the rent account in 2014 and 2015. This issue has persisted to the current day and the resident has lost confidence in the information the landlord has provided.

Orders

  1. Within one month of the date of this report, the Ombudsman orders the landlord to:
    1. Pay compensation to resident of £300 (comprising of £250 for the time, trouble and distress caused to the resident in relation to the failures in administration of her rent account, and; £50 for the time, trouble and frustration caused by the failings in the complaint handing). Any sum that has already been paid (such as the £100 offered via the formal complaint process) can be deducted from this amount.
    2. Ensure that someone with sufficient knowledge check the rent account and provide a report to the resident and this Service confirming the reasons for the arrears and the changing static arrears from the start of the tenancy. The landlord should confirm that the lump sum payments made in August 2016 are on the rent account and provide a copy of the full rent account statement from the start of tenancy to date, as it currently stands.