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 feel so sorry for both your mum and you. She put her affairs in the hands of the financial advisor and hoped they would deal with things. This sounds very hard at the moment but you will find it gradually gets worked through. Your mum is lucky to have you

@DuckbilledSplatterPuff

I feel so sorry for both your mum and you. She put her affairs in the hands of the financial advisor and hoped they would deal with things. This sounds very hard at the moment but you will find it gradually gets worked through. Your mum is lucky to have you

How is it the FA's fault? If OP's mum cashed in her bond, it's the bond company that does the paperwork, not the IFA. Op's mum should have been keeping a better eye on her own money.

I hope it all gets sorted but Im a bit surprised that your mum is only 70 and considered elderly, 70 is still young😉

It doesn't sound like a scam to me as the money has been paid to your mother not the other way around. I am struggling to understand how this could have been missed by the financial advisor if these payments were being made when the account was closed. You may have a claim against them if they didn't pick this up. I think companies can insist on money being repaid if it was paid in error, but it's civil not criminal, and not your DMs error, but theirs. I suspect they will just write it off, but I would get your mum some legal advice ASAP.

@notanothersaveusername

It doesn't sound like a scam to me as the money has been paid to your mother not the other way around. I am struggling to understand how this could have been missed by the financial advisor if these payments were being made when the account was closed. You may have a claim against them if they didn't pick this up. I think companies can insist on money being repaid if it was paid in error, but it's civil not criminal, and not your DMs error, but theirs. I suspect they will just write it off, but I would get your mum some legal advice ASAP.

Can you explain how the financial advisor is at fault?

They didn't set the payment up, the Mum never told them that she was receiving the money, they have no access to her bank account. What's your reasoning for how it's their fault?

Seek advice. This could be time barred. They can't claim back money for 20 years!

Obviously check out whether it's a scam first.
However, if it's real, the mistake is the company's and as such they can't demand the repayment to be made in one lot. It can be paid back in instalments over time, in amounts your mother can manage.

💐

I haven't RTFT just the OP.

It does sound like a scam but it sounds like you are exploring this.

If the payments have been made in error and your mum had been spending the money in good faith as she didn't know about the error then she has a defence to any claim by them.

It was their error and your mum shouldn't be massively financially disadvantaged because of it.

Sorry should say possible defence. I have not read the whole thing.

Also limitation.

You / she need legal advice.

@Angrymum22

Surely the person whose money she was receiving would have noticed years ago that they were not receiving the money they were due. I would say that this is a scam. It’s so easy to make a letter look legitimate. Also, if it was arranged by a financial advisor surely they would be informed of the mistake at the same time.

This ^ This all sounds very much a Scam to me. It is very easy for a scammer to get bits of information from random phone calls from legitimate sounding companies. A little bit of information from different calls paints up a VERY convincing picture of a person's personal information. 20 years and suddenly they notice.

The most important thing is you do not volunteer lots of personal information when you call. They should be able to tell you the information on few cryptic details. Like bank account the money was paid into, they could ask this but what they should ask is just certain numbers and not the full number. Not the account number, sort code and security code.

I would ask them to send everything to your personal email or address. Not discuss it over the phone where nothing can be proven. You could also say you want a full statement of the account from the beginning. No you're not going to pay for it, it was their mistake.
I would also make stunningly clear that there are no funds to repay this back and it will have to be paid back monthly. Do not negotiate over the phone, ask for all details in writing. Then take it to a solicitor or someone with knowledge.

I strongly suggest you post this on Martin Lewis's forum as they have financial experts there who will give you free advice.

How much was it a month? This makes a difference. Was all the money used every month?

I can see how it could easily be a scam. But as the op has advised it’s not we take it as read.

It is odd though. No idea how they’d match up bank details from x years ago without breaching data protection m/gdpr laws. And also the time it would take.

The correct recipient should have noticed surely?!

Yes your mums at fault for not reading things and blindly signing. But how could the FA know that’s what she was doing? They should maybe have actually sat with her and gone through paperwork but I’ve met with a lot of people (I’m an ex lawyer non practising now) and the amount of people who nodded and agreed that they understood when later on claimed they had no idea but just went along with it is astounding.

Given that you’ve sought legal advice I am amazed they didn’t tell you there is precedent on this.

Quick link here with some cases referenced but there are more.

In short, she won’t have to pay it back.

www.money.co.uk/guides/can-you-keep-money-accidentally-paid-into-your-bank-account.htm

I had the opposite of paying money to a company for well over a year and I know it’s not similar but it continued without me realising as I thought I’d cancelled it . The company (iD mobile) refused to refund the money I had sent them for nothing in return and there was nothing I could do . I guess at least it wasn’t 20 years!

@notanothersaveusername -I am struggling to understand how this could have been missed by the financial advisor if these payments were being made when the account was closed. You may have a claim against them if they didn't pick this.

I wish people wouldn't post if they have no clue about something. FAs have no access to their clients' bank accounts. How on Earth would he know if money was being paid in? Honestly. After encashing a bond, a client would contact the FA if they didn't get the money they were expecting, but an FA wouldn't know any more than the bond had been paid out.

They rely on their clients to tell them their incomes and outgoings.

[quote niugboo]Given that you’ve sought legal advice I am amazed they didn’t tell you there is precedent on this.

Quick link here with some cases referenced but there are more.

In short, she won’t have to pay it back.

www.money.co.uk/guides/can-you-keep-money-accidentally-paid-into-your-bank-account.htm[/quote]
Different situation entirely. That woman knew the money wasn’t hers and spent it anyway.

I wouldn’t deal with this yourself OP. If it were me I would get a lawyer to deal with all of this. You don’t want to make rookie mistakes on an issue of this importance.

They can advise you and write a letter explaining your mum’s age, circumstances and distress.

It might be possible to get them to waive all or some of it, or come a settlement on a token amount etc. It’s the company’s mistake.

Would be worth giving the Financial Ombusmen Service a ring and see what they advise. Worst case scenario you can refer the case to them if you can’t get the company to play fair. They will investigate the case and make a final judgment.

A friend of mine had £20k mistakenly put into their bank account by another bank when they were a young student. Father senior bank manager ( for another bank) said to transfer the money out in cash until the paying bank figured their error, which they did a few months later. Father bank manager then told bank that son had spent all the money frivolously and that he could only afford to pay £6k back as full and final settlement. They agreed. This was in the 90s and I was shocked at the time. However I figure that this is about getting expert advice ASAP to save stress and uncertainty (if this is not a scam).

[quote niugboo]Given that you’ve sought legal advice I am amazed they didn’t tell you there is precedent on this.

Quick link here with some cases referenced but there are more.

In short, she won’t have to pay it back.

www.money.co.uk/guides/can-you-keep-money-accidentally-paid-into-your-bank-account.htm[/quote]
That's not what the article you linked to says at all. It says that you can't keep money you've been paid in error. The example of people who kept the money, it sounds like it was a one off amount they were expecting, not dozens of monthly payments.

[quote Helpmymum]@SomethingElse2 yes I am wondering about whether we should mention in the response email that we have had legal advice. The solicitor friend said to put that but I am not convinced it's the right thing to do at this stage. So as of now the plan is to respond to the email with more questions then once as much information has been gathered as possible to respond with the suggestions from solicitor friend maybe omitting the part about having sought legal advice.

Going forward practically with my mum, I certainly need to go through her account and see what she is paying for things and check it out, will also need to work out what her income is vs expenditure as I guess she doesn't know that either. We have discussed today the option of power of attorney, it was infact mum who brought it up and said she would want us to do that. I think I will need to leave the dust to settle a little on this first but that will be the next step.

Again, thankyou to everyone for all the input and advice, it's been greatly appreciated and helpful. [/quote]
I think your solicetor friend has given good advice (unlike the many Mumsnetters who haven’t read your posts properly, if at all 🤦🏻‍♀️)

I’d question why you are thinking of asking the company for more information. I don’t see the point. You just need to make your position clear that your Mum was unaware of any incorrect payments going into her accounts, that she hadn’t received any paperwork about it and that she has spent the money. I think you could also point out that she has MH issues and should be treated as financially vulnerable. You should spell out that she won’t be paying any of it back. You could tell them that your Mother has come rely on this extra income and by withdrawing it it’s actually caused you mother financial and mental stress. I’d say that you consider the matter closed.

It was entirely reasonable of your Mum to assume these payments were legitimate after all those years especially as they have come from a large reputable company. This is not at all comparable to suddenly getting someone else’s house payment land in your account overnight where there’s clearly been a cock-up.

I’d keep the email or letter very short and clear. Remember that they have put your Mum into this stressful situation. I wouldn’t mention that you have had legal advice.

They should be apologizing not asking for the money back 😅

I don’t see what you would gain by asking for any other information. It’s their problem to sort out not your mothers.

If you were going to ask for advice from the media I’d always chose Martin Lewis from Radio 4’s MoneyBox.

I have a Mum who deals with financial things in much the same way as your Mum. It drives me nuts but it is up to her. Like your Mum my Mum is financially ok but I’m sure, once she dies or once I take over her finances (I have a financial LPA) I’m going to find that everything is a huge mess. The thing is it would cause her too much distress to deal with it so she just shoves a lot of things in a basket under her bed.

I can sometimes get her to tackle things with me but we do it very slowly and gently. I really don’t think your Mum has been ‘silly’.

I doubt you will have to pay anything back.

Good luck. I hope your Mum is ok.

All correspondance should be in writing - by letter or email. Head every communication with these or similar words:-

"I do not admit any debt to your company or any company you claim to represent."

I would probably not have replied to their initial communication. I would make them work for their money.

It is for them to show/prove that your mother received this money knowingly and that she was not entitled to it. Do not compound their error.

Talk to a solicitor. You won’t be charged for an initial chat. I haven’t RTFT but hoping you have already done this.

Never immediately hand over money for this kind of thing. Ever.

The best scanners use legit names sorry. I’m betting this is definitely a scam. If not they can’t force her to sell her house.

As @tenlittlecygnets she doesn’t have to pay anything

If your mother does end up paying the fund back, do take advice about any income tax which might have been paid on it. Presumably any repayment should be net of tax assuming you mother paid tax on it and the receiver will not have done. Your mother will not be able to reclaim the tax for 20 years.

It was entirely reasonable of your Mum to assume these payments were legitimate after all those years especially as they have come from a large reputable company. This is not at all comparable to suddenly getting someone else’s house payment land in your account overnight where there’s clearly been a cock-up.

This ^

Your mum hasn't perpetrated any fraud; she has spent money which she legitimately believed - and had every reason to believe - was her own. It is the bane which has made the error.

I'm not a lawyer, obviously but I can't see how they can expect to demand the money back now - and certainly not in a lump sum. Please speak to a solicitor about this, as it is horribly worrying.