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

I haven’t read through all the replies so apologies if someone has already suggested this. Have you applied for a Lasting Power of Attorney over your mum’s financial affairs?
Even if you don’t use it right now, you might need it going forward. It might help reassure her that you/your sister could keep an eye on her affairs more easily.

I remember a case of someone who was employed as part time but was in error paid as full time. When the company realised their mistake and tried to reclaim they money it went to court. The employee won the case as they said she genuinely didn't realise the error, so she didn't have to back pay. You could maybe see if you could make a case like this.

Yes I imagine it will be more hassle than it's worth for them to try and get the money back now. I'd send the email suggested by your sisters legal friend including the fact that you've taken legal advice - why would you not say that?

@Helpmymum

No the FA wouldn't of closed the bond without mums knowledge or consent but her most coherent explanation as to why she has no knowledge or understanding of any of this has been that she just signed any paperwork he sent without really reading it properly. Obviosuly this isn't his fault and he wouldn't of been aware of her mental state. It's horrifying that she would do this and it obvisouly looks like she has been very stupid and brought this on herself. The reality of the situation is that my dad died very suddenly when she was a young woman (both mid 30's) and she had two very young children. She was in a deep state of depression after his death for a long time and has never really gotton over it and as we now know depression can be so dapilitating on all areas of your life. She couldn't deal with the situation as a whole and so focused on what was the most important thing (bringing up the children). She managed to keep her head above water on this (she is a fantastic mum) but keeping on top of other stuff i.e finances, she just wasn't capable of.

Your mum hasn't been silly. She left the finance side to your dad while she concentrated on bringing up her two kids alone. That is heroic.

Tell her it's all sorted as it was a big scam or she will blame herself. It's THEIR ERROR!!

Her generation thought institutions were god and wouldn't question them.

Good luck in sorting it all out between you two sisters.

Xxxx

I don't think it's a scam but I think it's a mistake on the part of the bank. To me it sounds like their error and your mum should not have to pay it back; I'm pretty sure she can't be made to. Like a PP, I'm sure I read a similar story a while back. They have the resources to write this off and live with the mistake.

At most, I think they can only claim for 6 years due to the Limitation Act 1980 and even then it is debatable whether they can reclaim the money after that. Do NOT offer to repay until you have soight proper legal advice.

Mistakes do happen but I would imagine that she may not need to pay it back straight away or quickly. They will want her too but I would spend my time seeing if she has to do this legally. If she can pay it back very slowly and in small amounts that would be better then the remainder could come out of her estate eventually. Just my thoughts - no legal or financial background here - but that would be my first route.

Please DO mention that you have taken legal advice in your reply. It's important that you do. Your solicitor wouldn't have advised you too add that phrase if she had not considered it important.
Quite correctly, you have taken legal advice. That shows the company concerned that you are taking things seriously. It also shows that you know your rights and responsibilities or at least know how to check things out. Similarly, it will make them aware that you WILL check things out fully and not just accept what they say.

Letting them know you have taken legal advice can shorten the whole process considerably.

A lot of mixed up advice on this thread - the best advice is to have any replies checked by a lawyer.

Also on top of this I suggest you do not directly "ask" for information.... the natural reaction to that is for them to try to get the information - then they are more engaged -

not sure how I would word it but a more neutral approach like

"It is unlikely that reliable evidence is still available after all this time"

this suggests to them the idea of letting it go!!

again number one advice is to get a lawyer to check wording!

Sounds like a scam but if not I’m sure she could pay it back at a tiny amount per month.

Mistakes happen. People working in investment companies mistype sort codes, click on the wrong account, set payments up to Sarah Smith and not Sara Smyth. Checks and balances don't always catch every error. You'd think that in most cases, Sara Smyth would question where her money was after she thought she'd start receiving an income, and the fact it was actually going to Sarah Smith would be picked up quickly. Or income from the same bond was being paid twice, to two separate accounts. But for whatever reason in this case it hasn't been picked up.

OP's mum has not being trying to diddle her investment company. But the company doesn't know that. For all they know, they've a right CF on their hands who has been receiving money into her account for decades and keeping quiet about it. Which is why they are taking the hard line.

All the stuff about GDPR is irrelevant - the payments were set 20 years ago, at a time when the OP's mum was (or was recently) a customer, and as payments are still being made to her of course tehy have her details.

Agree with the other advice on getting a solicitor involved, and sounds like you have had good advice from a friend already OP. Agree also that you need BOTH a financial and health power of attorney.

My late mum had an income bond that paid her a monthly income of about £350 a month. The amount invested to generate the income was significant - around £200k. So if your mum's bond was cashed in, I would want to check what happened to the money then.

@gottakeeponmovin

I was under the impression that the maximum time they can claim back for is 7 years. Still a lot of money though

This was my first thought as well. Even if it turns out to be correct the Company is at fault. Also what about the account it should have been paid into? Wouldn’t someone have queried this long ago?

It’s either a scam or a mistake. Easy for a scammer to get a name of an employee by searching Linked In and then sign their name to a fake letter. Easy also to google a company phone number and put it on a fake letter. Most people don’t physically phone these days so scammers just put a general real phone number on there to make the scam less discoverable.

It could be a mistake by the company too...the bond may never have been closed out and the payment are legitimate. I remember my parents telling me about a bank chasing them saying they still owed money on their mortgage....but it had been paid off years prior. They had kept the documents and letters and went to the bank and the bank admitted they were mistaken, my parents had paid off the mortgage loan and did not owe them money.

Strange that the customer whose bond it was has not questioned why they’ve not not been receiving their money for the past 20 years.

In any case your Mum needs to be guided by her financial adviser on this matter, not by Mumsnet.

Sounds like someone has got hold of the info about your mum's correct pension payments and have invented a ruse to intervene and get her to pay it all back to them. I would investigate with the pension company and not pay a penny until it is clear to all concerned that she is liable. Even then it's doubtful that she will have to. And anyway, if these payments shouldn't have been paid to her, what pension payments would she have been receiving to survive on? Fishy, very fishy!

How stressful for you all. I’d get all info and seek proper independent legal advice. Records won’t be held indefinitely in archives by ifa. Whatever outcome it’s really poor form to have written to an elderly lady at close of business on a Friday out of the blue after 15 years.

If its genuine and not a scam, you could get some advice from the Financial Ombudsman - they might be able to challenge it on your behalf. I used them a couple of years back with something my Dad had and they won the case for us.

I would get advice first but if as you say it is a well known company, i think she would have a good arguement in the fact that if they have been paying out all these years and it has only just come to light, then i don't think much of their auditing system,

Tell her not to worry, it was their fault so your mam can pay a small amount back monthly. If you offer this not alot they can do

Another vote for the problem money lady from Daily Telegraph. She always sounds very approachable.

Just skimmed through and read your posts OP.

Advice received is correct. Keep reiterating that your mum cannot afford to repay that she received the money in good faith. I work on the other side of this, for a company that would be sending the letters. They will always try to get the money back but the fact that your mum has spent it is significant. Keep repeating, accepted in good faith, money spent, cannot afford to repay, doesn't have funds.

If it really gets down to court proceedings, offer to set up a repayment plan of a few pounds a week as that is all she can afford.

Remember that your mum will no longer have this income too so she will have to budget for the loss in income.

If she genuinely believed the money was hers and had a good reason for that belief, she may not have to pay it back. There have been a couple of cases on this. Please get legal advice for your mum as her case could come into this category

Posting on the Martin Lewis forums may be a good idea also.

Your mum has really done nothing wrong here and has not been silly. She used a IFA and trusted them because she knew it was beyond her limitations to deal with her finances. Never underestimate what shock can do to a persons brain.
I feel what happened to your mums investments that closed down is a bit vague. She probably thought this money was from that.

If this has been a mistake on the companies behalf your mum should never offer to pay the money back. They are trying it on.
She hasn't done anything fraudulent. They shouldn't have made the mistake.
Do not offer to pay anything back and do as your solicitor friend said.
I hope your poor mum is ok and this doesn't stresss her out.