Really strange error & now mum owes thousands- help

[Helpmymum]

I'll try and keep this as simple as possible, I'm just seeing if anyone has any advice or insight into how this might play out before we start contacting people tomorrow.

My elderly, widowed & (totally alone for the past year 😪) mother got a letter late Friday afternoon which was spent special delivery from a pension company. In short, it said that she took a bond out 20 years ago which was cashed in 15 years ago and her account was closed, she was no longer a customer. They then said that they are really sorry but they have just discovered during an audit that they had mistakenly used her bank account details with another bond for another customer and she has been receiving a monthly payment for the last 20 years in error. This amounts to an awful lot of money, tens of thousands of pounds. And it needs to be repaid. We have checked and she has been receiving the payment in her account.

She was widowed a long time ago and when my father died, my sister and I where both toddlers and so she employed a financial advisor to deal with the finances, obviosuly to eliviate the stress. She is not wealthy by any means, she owns a modest house (which was paid for by my dad's life insurance policy), has a small amount of savings (which is with the financial advisor invested in whatever he thinks) and collects her pension.

I can understand why she wouldn't question this money going in as she just left everything to the financial advisor, he obviously opened the bond and cashed it out and payments of this nature were expected/ perfectly normal.

After receiving the letter, my sister immediately called the financial advisor who said he had never dealt with anything like this before and was working from home, he would need to go into the office on Monday morning to have a look at the records. My sister then called the company in question, it's a large, well known company so she didn't take the number from the letter just incase it was a scam and found the number from Google. She called and a person in the company could not find any record of this or the letter having been sent out, however she did say she wasn't part of the relevant department and the person who's signature was on the letter did infact work there. It was so late on Friday afternoon, there was no one there who could help or knew anymore.

My poor mum has been in an absolute state all weekend, she's thinking she is going to have to sell her house to pay this back. I think technically she does owe the money as we can see she has recieved it. Does anyone have any idea of what might happen?

First thing tomorrow is a call to citizens advice and legal advice, obviosuly talk to the financial advisor and the company in question too.

I think I'm just asking if anyone knows what we might be in for here?

Thanks

@JayAlfredPrufrock

Your poor mum.

I always think I have a great memory but as I’ve got older it’s definitely deteriorating.

And if your mum was paying a financial adviser she shouldn’t have had to worry about such things.

Nonsense. An IFA has no access to clients' bank accounts so would have no idea what payments a client was receiving. The client is responsible.

[quote tenlittlecygnets]**@AliceMcK* - I'd also be seeing what responsibility the financial adviser has, as he must have known what was happening if he was managing all your mums finances. Make sure that the financial adviser isn’t also the financial adviser for the other alleged customer and that he’s not been up-to anything dodgy*

How would that work?? The FA has no access to any clients' bank accounts. How would they???

The financial institution made an error - eg typing one wrong digit in the bank account number. How is that the FA's fault ? The amount of disinformation on this thread is terrifying.[/quote]
The ops mum dosnt know what she’s signed, whether she even took out the original bond with the company and closed it for them to even have her bank details. The op and her sister have been trying to establish exactly what’s happened, the adviser should know this information especially what she was originally paid out.

Also the adviser is saying he would not have knowledge of money she is being paid into her bank account, if this is the case then he is not doing his job properly, if he is managing her money, making investment choices for her he should have been doing full fact finds and statement of earnings and talking about her finances so he can act in her best interests when making financial choices for her, this includes regular income, and after 20 years of regular payments, this is in fact regular income. He should not just be blindly sending her documents to sign without meeting her, ensuring she is fully understanding of everything and knowing what her risk and financial situation is.

@TeenTitan007

I have heard (anecdotally) of cases where someone transferred a vast amount into another persons account. Turned out to be the wrong account/person. Bank requested them to give back the money and recipient refused.the case went to court. The court ruled that the recipient keeps the money since it was the sender's mistake. I'll try to find this story, it was online and really shocking.

not a vast amount but have been on both sides of this error . First i received a few payments into the account i was using a lot while selling lots of stuff on eBay. Noticed a large amount being removed and contacted the bank who said it was an error and boom- gone. Yes it wasn't mine and i thought fair enough. A few years later i made a mistake and transferred a large amount of money (house deposit) to the wrong recipient . Immediately called bank to stop and get money back and was told -tough you gave them the money , it's theirs and as you did it yourself we can't help. Had to take the legal route as the recipient refused to pay it back and luckily case was found in my favour as a genuine error. Also got compensation from the bank as i could prove they can do recalls for genuine errors and that i had been treated unfairly.

There's a huge lack of information on this thread. People who think the OP's mum's IFA should know what's in her bank account: they don't. IFAs have NO access to clients' bank accounts. They have to reply on what the client tells them about their income and expenditure.

Financial advisors have a huge amount of paperwork to fill in, and compliance looks at a %age of their cases. My dh is an IFA. If he sees a client aged over 70, his company recommend that a family member is present; if a client is over 80, it's strongly recommended that a family member is present. But of course many clients don't want their kids to know about all their finances.

If dh suspects a client is not compos mentis enough to understand their investments, he contacts a family member - with their permission - and talks to them.

Whatever has happened here this is not the IFA's fault. Looks like the bond company has typed a wrong number in the bank account. I have no idea why it hasn't been picked up sooner, but OP's mother DOES have responsibility for not opening her mail or taking any interest in her finances, I'm afraid.

One thing if you are having to help your mum in this way - are you entitled to a covid vaccine for being a carer. May be one less thing for you to have to worry about.
I’m sorry you’re having to go through this? It’s good you’re getting some advice on here.

OP= hope everything is sorted for you and your mother , it certainly is a steep learning curve so my advice is to take your time and go at your pace , after all they have taken years to identify any error and chase it , and you shouldn't be expected to resolve it in a matter of days.

@AliceMcK - Also the adviser is saying he would not have knowledge of money she is being paid into her bank account, if this is the case then he is not doing his job properly

Wrong. An IFA has no access to client's bank accounts! Don't be so silly. All an IFA goes on is a client's account of their income and expenditure.

if he is managing her money, making investment choices for her he should have been doing full fact finds and statement of earnings and talking about her finances so he can act in her best interests when making financial choices for her, this includes regular income, and after 20 years of regular payments, this is in fact regular income. He should not just be blindly sending her documents to sign without meeting her, ensuring she is fully understanding of everything and knowing what her risk and financial situation is.

You have NO IDEA what the IFA has been doing. All you have is OP's account. She doesn't mention if the IFA still sees her mum, or anything else.

DH is an IFA. The profession is highly regulated. Paperwork eveyrwhere. Compliance everywhere.

The OP;s mother is at fault here.

@tenlittlecygnets

There's a huge lack of information on this thread. People who think the OP's mum's IFA should know what's in her bank account: they don't. IFAs have NO access to clients' bank accounts. They have to reply on what the client tells them about their income and expenditure.

Financial advisors have a huge amount of paperwork to fill in, and compliance looks at a %age of their cases. My dh is an IFA. If he sees a client aged over 70, his company recommend that a family member is present; if a client is over 80, it's strongly recommended that a family member is present. But of course many clients don't want their kids to know about all their finances.

If dh suspects a client is not compos mentis enough to understand their investments, he contacts a family member - with their permission - and talks to them.

Whatever has happened here this is not the IFA's fault. Looks like the bond company has typed a wrong number in the bank account. I have no idea why it hasn't been picked up sooner, but OP's mother DOES have responsibility for not opening her mail or taking any interest in her finances, I'm afraid.

But it sounds like the IFA was enlisted by OP mum years ago and 70 isn't old.

If you look at OP posts, I think she is quite right, it is her mum's responsibility that she signed things she didn't understand.

We don't know yet who else is at fault here, no point jumping to conclusions. OP and family have to calmly go through all the papers and compile questions from there.

You're obviously on the right track with everything to be doing but can I just suggest if you haven't already got POA in place you do it now

[quote tenlittlecygnets]**@AliceMcK* - Also the adviser is saying he would not have knowledge of money she is being paid into her bank account, if this is the case then he is not doing his job properly*

Wrong. An IFA has no access to client's bank accounts! Don't be so silly. All an IFA goes on is a client's account of their income and expenditure.

if he is managing her money, making investment choices for her he should have been doing full fact finds and statement of earnings and talking about her finances so he can act in her best interests when making financial choices for her, this includes regular income, and after 20 years of regular payments, this is in fact regular income. He should not just be blindly sending her documents to sign without meeting her, ensuring she is fully understanding of everything and knowing what her risk and financial situation is.

You have NO IDEA what the IFA has been doing. All you have is OP's account. She doesn't mention if the IFA still sees her mum, or anything else.

DH is an IFA. The profession is highly regulated. Paperwork eveyrwhere. Compliance everywhere.

The OP;s mother is at fault here.[/quote]
Are you my ex bosses wife?

Of course I have no idea what the adviser has been doing, of course I only have the Ops account, which is what I’m replying too 🙄

I’ve also worked for IFAs in the UK and there are definitely very illegal and immoral dealings going on with the highly professional and regarded IFAs including forging client signatures and deliberate misleading of clients. I’ve witnessed this with my own eyes. The highly regulated and compliant financial institution didn’t have a clue what was happening. It’s why I got out of the industry in the end after reporting them. It took five years before anyone got back to me to actually investigate.

Sounds like it’s absolutely a scam.

However if it isn’t, there is no way I would pay it back anyway - they are a big company and it is there fault. Write to Katie whatshername at the Telegraph - however I don’t think you will need to because it’s a scam.

As PP's have mentioned any debt not under deed can only be pursued within 6 years so whatever was paid for the first 14 years is irrecoverable in any event. For the payments made within the last 6 years then they may be able to recover them if they can prove your Mum knew she was receiving them and wasn't entitled but it would be down to a court to decide if they took it that far. As your solicitor advised it would be for them to prove and you should stress her age and her inability to repay any of the sums and under no circumstances admit liability for any amount without taking legal advice.

Sounds like it’s absolutely a scam

@partyatthepalace read the thread. It's already been established that it's not.

@AliceMcK:

The op and her sister have been trying to establish exactly what’s happened, the adviser should know this information especially what she was originally paid out.

It was 15 years ago! He won't have that info to hand. My dh pays for a secure storage facility for client info, plus he has several filing cabinets. IFAs in the UK are not obliged to keep old client info forever - I think it's 6 years.

Also the adviser is saying he would not have knowledge of money she is being paid into her bank account, if this is the case then he is not doing his job properly

Nonsense. FAs don't get to see their clients' bank statements.

if he is managing her money, making investment choices for her he should have been doing full fact finds and statement of earnings and talking about her finances so he can act in her best interests when making financial choices for her, this includes regular income, and after 20 years of regular payments, this is in fact regular income. He should not just be blindly sending her documents to sign without meeting her, ensuring she is fully understanding of everything and knowing what her risk and financial situation is.

Like I said earlier, the OP hasn't said if her mum is still a client of his, so you have no idea if he has been visiting her or 'blindly' doing anything. FAs have to believe what their clients tell them about their incomes and outgoings.

[quote tenlittlecygnets]@AliceMcK:

The op and her sister have been trying to establish exactly what’s happened, the adviser should know this information especially what she was originally paid out.

It was 15 years ago! He won't have that info to hand. My dh pays for a secure storage facility for client info, plus he has several filing cabinets. IFAs in the UK are not obliged to keep old client info forever - I think it's 6 years.

Also the adviser is saying he would not have knowledge of money she is being paid into her bank account, if this is the case then he is not doing his job properly

Nonsense. FAs don't get to see their clients' bank statements.

if he is managing her money, making investment choices for her he should have been doing full fact finds and statement of earnings and talking about her finances so he can act in her best interests when making financial choices for her, this includes regular income, and after 20 years of regular payments, this is in fact regular income. He should not just be blindly sending her documents to sign without meeting her, ensuring she is fully understanding of everything and knowing what her risk and financial situation is.

Like I said earlier, the OP hasn't said if her mum is still a client of his, so you have no idea if he has been visiting her or 'blindly' doing anything. FAs have to believe what their clients tell them about their incomes and outgoings.[/quote]
I think your taking this rather personally. After 15 years of working with financial advisers I am fully aware that they like to wipe their hands of mistakes as nothing is ever their fault.

I am simply telling the OP not to just accept her mother is at fault, that she needs to ensure the adviser wasn’t aware of this or should of been aware of this instead of just outright blaming her mother.

I do stand by what I said that the adviser should NOT be sending her documents to sign without fully going through them with her. If he did go through them then he will have evidence to support this and absolutely nothing to worry about.

@TeenTitan007

I have heard (anecdotally) of cases where someone transferred a vast amount into another persons account. Turned out to be the wrong account/person. Bank requested them to give back the money and recipient refused.the case went to court. The court ruled that the recipient keeps the money since it was the sender's mistake. I'll try to find this story, it was online and really shocking.

This happened to ds. A customer paid him £1000, but input one digit incorrectly. This was before the banks introduced account checking. The money went into the wrong account. DS didn't get paid, the recipient kept the money. No action could be taken.

Sounds like a scam to me too. However, even if not, your mother should not have to sell her home, surely? The company should have picked up on any problem years ago. Definitely time for her to see a lawyer, I'd say. This isn't within the remit of a financial advisor, it's much too complicated for that if it turns out not to be a scam. Wishing her luck.

I would contact citizens advised they could help sort it. I'm sure there is a time limit on when a company can ask for money paid in error be returned as they have a duty of care which they have failed. Also be looking to see if an error was made by the financial advisor and if so claim against their Professional indemnity insurance.

Sounds very much like a scam, it try citizens advice, good luck.

IT IS NOT A SCAM!!

RTFT!!! 🙄🙄🙄

It is a scam, please call the Police now.

@LowlandLucky

It is a scam, please call the Police now.

If that's a joke post @LowlandLucky it's really not at all funny. If it's not maybe at the very least read the OP's posts before you post on a long running thread

If it's not a scam and once fully investigated, a reputable company should write the money off as it was their mistake. If they insist on payment make an offer of £1 a week.

They are trying it on asking for the money back. It was their mistake and they will have to take the loss. It's a lot of money to your mum but to them tens of thousands of pounds is chicken feed. It wouldn't be worth them making a legal case of this. It would probably cost most of the money involved and would make their very careless mistakes and sloppy accounting a matter of legal record.

If your solicitor friend has advised you to tell them you've taken legal advice about this why aren't you taking that excellent advice? What's the point of asking an expert and what to do and then ignoring them? Getting informal legal advice isn't binding or threatening, it's just sound common sense.

@Charley50

I don't really know, but don't let her pay it back immediately, as it still sounds like a scam to me. Also, she might not be liable for any or some of it. If it's legit, it's the companies error, and they should have discovered it earlier. If she has to pay any back, I imagine it can be in instalments. Still think it's a scam though.

THIS ^

And even if it isn't scam, it's money she was paid, and which she took in good faith. She may not have to pay ANY of it back, - and it may be that even if she is liable fo some of it, the debt may be statute barred from (say) seven years ago - not decades, and she would be withing her rights to ask for time to pay at £X /week, I'm sure.

It will be worth getting in touch with Citizens' Advice Bureau - and also contact police in case this is a scam.