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 think you need an IFA to look into this for you or the one who dealt with it.

I think it's poor practice for a large company to contact an elderly person without establishing their health etc.

I think having a third party involved handling the correspondence would help your mum. There could also be a complaint against the company for their error also. Don't panic about paying it back right now and seek advice tomorrow

To everyone saying it's a scam, why would the scammer put no payment details on the letter but include the real phone number of the company and name of a person who works there?

@Helpmymum

Yes have tried googling the number and scam and nothing is coming up. Tried googling the company name and scam and it just pulls up a section on their website with advice about scams/ fraud. Is there anything else I can do? Checked the envelope again (it was a big a4 size with cardboard backing) and it was delivered via tnt express.

From what you're saying it doesnt sound like a scam. But I think.take the advice you've been given. Get legal advice and if needed even write to a newspaper money advice column. I think if your mum does have to pay it back she will be able to do it in small installments. And also they may even write most of it off. It was their mistake and it's been years since it has been going on. As someone said the statute of limitation is 7 years. They shouldn't be able to claim anything prior to that anyway and because it was their mistake then a lot of it should be written off. Obviously I'm not an expert. But if I'd got it confirmed that a mistake had been made then I would write to one of the newspapers money advice columns and hope they could get it written off. They usually give you compensation for all the distress caused too.

Please tell your mum not to worry . They can’t make her pay back more than she can afford and as it’s their error as well they might come to an arrangement to pay back part of the money over a very long term.

I would recommend perhaps the Martin Lewis website forum for initial advice and perhaps a legal letter might make them rethink . Do you hav financial power of attorney ?

I would speak to an IFA over a solicitor, they will be able to get the information quicker and advise if you need to pay for legal advice.

It's an unusual situation and asking for the sum outright smacks of an error at their end.

Please don't panic

Don't pay a penny. I would be looking at going to the ombudsman about this. It's the company's mistake. I don't think she should have to pay that back at all.

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.

This and @SionnachGlic's advice is really good. Arrange straight away which of you (not your mum) is going to be the spokesperson on this and the only person that the company deals with, and tell your mum that she doesn't need to worry or deal with it personally. Once she's given permission that person will be able to speak to them on the phone. It might be that mail from them still has to go to her address though. Get that sorted asap for her peace of mind.

Hi - I have not read the full thread (sorry), but these cases sometimes hinge on good faith, and whether your mother could reasonably have been expected to notice. As it goes back a long way, I think you could reasonably argue that even if the amount is due, it would cause financial hardship, the error is not your mother;s and therefore should be paid back at a small amount each month. Definitely get advice on this before agreeing anything at all.

@AcornAutumn

Just as an example

Mum got calls about fraud from a scammer who had cloned the bank's fraud department number.

It is amazing what they can do.

Ex work colleague had this just last week. The amount of info the fake bank had lead him to believe it was someone from his bank carrying out the scam. They knew about direct debits, other payments etc. They were phoning from a bank number (customer service phone number came up on his phone). He's clued up enough to twig it was a scam pretty quickly though.

IReallyNeedMoreGin

Yes. Unfortunately mum went into a complete panic and I had to take her to the bank in person, which was a hassle but she couldn't go alone.

I'm dreading it happening again.

But for OP, fingers crossed it is a scam.

If you're in the UK, I'd give Which? a call. If this is a scam, it's a pretty sophisticated one. If it isn't, it's a terrible way for a company to behave.

It could be a scam.

If it isn't don't acknowledge a debt. Just ask for more info as suggested above. If they are difficult given the sums at stake it could be worthwhile getting a solicitor involved.

Very similar thing happened to my father, it transpired that he was being overpaid pension funds for 16 years (pension company beginning with K) which amounted to almost £100k. We had to pay some back but nowhere near the amount they requested. Very stressful situation, happy to help if you need any advice.

Agree with PPs. This looks like a scam. If it isn't I vaguely recall court cases where payments were made regularly and because they were genuinely believed to be accurate the banks were prevented from claiming the money. It's called estoppel. DON'T repay this until you have checked it out thoroughly and please tell your mum not to worry

On the not a scam theme - if it was their mistake I dont see that they can hold your mum responsible, and it seems that the financial advisor has some liability here too. I dont think your mum should offer to pay anything back until she has sought professional advice and if it does end up with her paying back she should be making minimal payments only. I would guess that they have the means to forgive this, but will try for repayment first if they can guilt her into it.

@Dustyboots I've just put that on to listen to but it's 45 minutes long, did it talk about this in a similar circumstance to what's happened to my mum? She hasn't had any phone calls, just a letter so far.

@Dustyboots I've just put that on to listen to but it's 45 minutes long, did it talk about this in a similar circumstance to what's happened to my mum? She hasn't had any phone calls, just a letter so far.

Your poor mum, that sounds so stressful. I'm glad she's got you and her financial advisor to help. Hope it gets sorted, scary if it is a scam!

@Gemma2019 oh how awful for your father, I'm sorry to hear he's had a similar situation, its very stressful. It's a different company. Yes if you have any advice on how you approached the situation it would be greatly appreciated.

I have not read the whole thread, sorry, but I really endorse the advice of a previous poster. If you don't get anywhere good quickly with the company then contact the Daily Telegraph financial problem column. Honestly this is exactly the sort of thing they get sorted in very good ways, I read this often. Your poor mother. What a lot of stress for her.

I would say it sounds like she might be liable to pay it back but unless the company could prove your mother either A. Committed fraud to receive the payment (which they've already said they made the error so thats not the case) or B. Took the money knowing it was an error (which is impossible to prove even if it was true) ... If they cannot prove that then they would have to potentially sue her (a court wouldn't necessarily be inclined to side with a company who made an error for so long) and even in that case your mother wouldn't be expected to pay it all back immediately, she'd likely be able to set up a payment plan which could be a small amount a month.
It sounds flimsy to me on their part. They didn't realise the error so your mother can't be expected to either. Also the fact her details have potentially been compromised in this error means they're liable for some issues too.
Definitely hold off, seek advice and do not pay this company yet or agree to ANYTHING.

it does sound distressing for her i hope you can sort it out

Your mum sounds like a "vulnerable client" in financial advice terms. She is elderly, ill and is unaware of the circumstances. The bond provider needs to tread VERY carefully here- please bear this in mind when dealing with them and make sure they know this.

So your mum carried on receiving income for an investment she no longer had for 15 years and didn't think to query it? Did she have other investments that the income could have been from?

Why didn't the person the income should have been going to mention it sooner?

All sounds pretty dodgy. The IFA should be able to help. Hope they get back to you soon.

@TiddyTid

Your mum sounds like a "vulnerable client" in financial advice terms. She is elderly, ill and is unaware of the circumstances. The bond provider needs to tread VERY carefully here- please bear this in mind when dealing with them and make sure they know this.

Perhaps now, but was she 15 years ago? Probably not.