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

Sounds like a scam. They have gotten records somehow of money going into your mums account (that’s probably hers and she is entitled too) and is now saying it’s all a mistake and not her money, pay it back.

Just sounds like bullshit really. How can money go out for years and no one notice. How does a financial advisor also miss it. Even if the person is in a different department surly it would still come up on the company record about what’s happened.

So what is someone who is named that works there, you can find any name in any company, you just email them and someone responds back with a name so I wouldn’t worry about that either.

Ultimately it's the companies fault. You need to get legal advice as your mother has someone else dealing with her accounts she was not aware where this money actually came from. If she had I'm sure she wouldn't of accepted the money.

Do not set any payment plan up. Do not hand over a penny. Communicate with them a lot so they are aware you're willing to speak to them etc. by email so you have a record

Get legal advice ASAP as I don't think she should pay a penny back. That's their mess up and she wasn't in control of her accounts.

I agree with the above

Its the companies mess, they have not shown due diligent - payment for 15 years incorrectly!

Id suggest they stop payments and look at their administration methods as they are woefully poor. Id also suggest that they are going to have to put this down to a bad experience as your mother hasn't go the funds to pay back the money incorrectly paid.

Your mother is elderly and would highly likely be classed as vulnerable according to the financial services definition.

Financial services companies have a legal and regulatory responsibility to treat customers fairly, and with even more consideration if they are vulnerable.

Don’t pay a thing or engage with them.

Existing financial advisor first port of call, legal advice via home insurance (or, if you can afford it and are willing, separately)

It could so easily be a scam.

People working for organisations that have these details have been known to use them or pass them on, and letters can be made to look entirely legitimate.

In any case, even if it’s not a scam, I would think mistakes like this are down to the company’s own error.

It will be interesting to see what the FA thinks.

It may well turn out that the payments into her account are actually legitimate.

It might be a scam so tell your mum not to worry too much.

Secondly, every financial services company has a duty of care to treat their customers fairly. They will never make anyone homeless. They will never put her in a position where she scant afford her utility bills. She may have to pay the money back, but only online with what she can afford. That might be £1 a month, and if that's it, then that's the amount she will pay.

Assuming it isn't a scam... I have a hunch...

Company can whistle for that. It was their error. She hasn't committed fraud or done anything wrong.

good you've got other legit people involved and they can sort out the details. It would not surprise me if the worst case scenario is that the payments shouldn't have been paid, but they won't be able to demand the money back from her. "Best case".. .could still be a scam.

I think they are probably trying their luck, she needs to get proper legal advice. I thought there was a a rule somewhere to do with paying money into an account by mistake that it becomes the recipient.
In any case they can’t expect her to pay it back all at once.

If it isn't a scam, don't acknowledge the debt and seek legal advice. From my research many moons ago acknowledging the debt restarts the clock on statute of limitations.

Speak to them tomorrow. Your position is “we have no idea what you are talking about, my mum has never knowingly received money she wasn’t entitled to. I am sure you have made an error. Please can you put in writing exactly what transactions you are talking about, as everything that came into my Mum’s account tallied with what she was told by the financial advisor who had looked after her affairs. I really can’t say any more than this until you set out exactly what happened and when, so that her financial advisor can check against his records”. And say absolutely nothing else. Refuse to discuss any repayments and repeat that they will need to give you chapter and verse on what happened and when, and you certainly aren’t going to agree anything with a complete stranger on the phone.
Probably not a scam, by the way. I work in banking and this stuff is commonplace. Banks will ask for money back, but their expectation of recovering more than a small portion of it might not be that high. Let them do all the donkey work to prove it, then tell them she believed it to be money entitled to her. Only if they keep on pushing after all of that would you need a legal advisor, and I imagine their advice might be for her to offer to pay back maybe a fiver a month. They may chase up, but it will take months, and no ombudsman will make a ruling against her that would represent a material detriment - especially if the money was no more than the size of a normal monthly pension. It would be different if she’d known all along, out of the money was a stupidly large sum coming out of the blue.

@Pixxie7

I think they are probably trying their luck, she needs to get proper legal advice. I thought there was a a rule somewhere to do with paying money into an account by mistake that it becomes the recipient. In any case they can’t expect her to pay it back all at once.

There's no rule that says that, I'd say that every case would have to be decided on the specifics IANAL but I know there is a defence if you genuinely have a reason to think the money is yours

I don’t think she will end up liable for all of this even if it’s legitimate. I agree with others, get onto one of the newspaper financial advisors, publicly on SM is fine. Companies make write offs all the time. Don’t pay anything. You can have a very good crack at getting this written off.

I think it’s a scam, but I’d expect her bank to offer advice on how to proceed. She’s VERY unlikely to have to pay back a huge lump sum.

@sweetheartyparty

If it isn't a scam, don't acknowledge the debt and seek legal advice. From my research many moons ago acknowledging the debt restarts the clock on statute of limitations.

Yup, that's still the case. Do not acknowledge the debt. Don't sign anything. Make them detail exactly what they're talking about, in writing. They can't just suddenly demand it all back. Well, they can, but they can't enforce anything without it going through court.

Get some professional advice, but don't panic about it. Even if their story is genuine, they can't ask for more than the last 6 years of the debt back, and even then, they'd be obliged to accept installments, given that they've sprung this out of nowhere.

Figure out if it's legitimate and speak to CAB or a lawyer if you can afford one. The leading case in this area is Lloyds Bank V Brooks and if she has altered her position on receiving the money (ie spent it) and had no reason not to expect it was due to her, then there is every chance it's not repayable.

I'm in receipt of my late husband's company pension from the UK and have to periodically declare I still exist to continue receiving it.

I know the money in question here is not a pension, but still....

Well it sounds genuine but surely they do an audit more than once every 20 years!!! Or even 15 years if she was entitled to the money for the first 5 before she cashed the bond.
I would advise that person at the Daily Telegraph as suggested above if they try and get the full amount back.

Hi OP, I have worked in financial services in the past and unfortunately this type of mistake does happen.

The company will be obliged to try to recover the money, even though it was their mistake.

Your mum will not be forced to sell her house or otherwise financially disadvantage herself. But you should try to meet them halfway. For example agreeing to pay back the money at a very small amount per month or putting a charge on her estate.

Depending on the company they will be more or less determined to pursue this. They may send letters to your mum that sound threatening or ominous. You will have to be firm with them. This is their mistake and it's up to them to find a way to rectify it that doesn't inconvenience an innocent elder person.

Oh no what a nightmare 😔 I doubt that citizens advice will be able to do much more than just explain the position and possibly signpost you to a solicitor should you wish to take it further. I would Call and/or email the company and get to the bottom of what is owed, and then consult a Solicitor in a dispute resolution department. Even if it is deemed that you do need to repay the money, I think it would be fairly reasonable for a negotiation to take please that takes into account the mitigating factors and possibly come to an agreement. She could probably pay back and agreed some monthly like it was paid, very unlikely it would be demanded as a lump sum in the circumstances.

Check your home insurance policy to see if it covers you for legal expenses before consulting with a dispute resolution solicitor. Good luck- try not to worry it will get sorted these things always do

My first job paid me an extra month in error and contacted me. I had to pay it back, obviously. I think, given the details from the OP, it is unlikely to be a scam. Please listen to the advice from people who work in the industry and try not to panic.

Definitely tell her not to worry. If they have made an error they can’t force her to pay back all in one go even if they try and demand she dose. It’s a very long time to go unnoticed especially if the money was supposed to be going to another customer, why has that customer not noticed all this money not being paid into there account? Also this can’t be there only audit in 15 years, that’s just plain negligence on their part if it is.

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.

There's literally just been a program on Radio 4 about this.

It definitely is a scam, I think - and it's happening more and more according to this program.

www.bbc.co.uk/programmes/m000tmb4

It was on this program.

Poss a scam if someone has got hold of her bank details but still sounds very convoluted. But surely a legit financial services company would be insured against this kind of mistake?

Assuming it is not a scam she needs to get a lawyer involved asap.

Once you establish it is legit, get your Mum to sign an authority/ consent permitting you or your sister to deal with the company & financial advisor (FA) on her behalf, send out account statements etc. Ask them to send out everything they have relating to the product (at the time it was purchased) incl KYC information & everything your Mum signed. Best if only one point of contact so information is not lost. DO NOT agree to anything in terms of resolving/repaying or acknowledge any mistake on your Mum's part. Get on to FA first thing, tell him this is causing huge distress & needs sorting urgently & can he clarify explain how such a thing could possibly have occurred. Get a solicitor & file a formal complaint with the Pensions Board or Regulator once you have the full information. Tell your Mum she is not to worry, you are on the case & will get it all sorted out.