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 would check the tax situation. If she had to declare her income for any investments then her tax advisor would be aware of this payment.

I would also place the blame with the company who failed to correct their mistake.

Her IFA will hopefully have some insight tomorrow.

Very odd. The IFA should be able to advise on this, given that is what your DM has been paying them to do. Surely they accept some liability for incorrectly advising their client & open to being sued themselves by DM if this proves to be correct?

she is the type of person who doesn't open/ check bank statements, she doesn't do online banking etc and with being ill and old she just doesn't keep on top things

Once this is all hopefully sorted out, given what you've said above it might be worth considering power of attorney for you/DSis. It will mean you have the ability to step in a lot more easily which might well be needed if she's avoided thinking about anything financial for a long time.
Hope she's doing OK, she must be so worried

This link may be useful OP. The last paragraph may be particularly salient. www.allenovery.com/en-gb/global/news-and-insights/pensions-in-dispute/common-member-complaints/recovery-of-overpaid-pensions

My husband (lawyer) says:

1. Statute of limitations mean they have no claim on any money after 6 years
2. There is a principal of law that if she changed her position due to reliance on the payment in good faith they won't be able to recover it (Google: Change of Position) So she shouldn't have to pay it back according to this principle.
3. The organisation is FCA regulated. Their regulations says she needs to be treated fairly: not clear that is the case here. She can complain to the FCA.

Husband says start with Citizens Advice Bureau. He thinks it's so straightforward, not necessary to get a lawyer involved at this point. If she gets a lawyer , they'll get one. It will escalate things & costs will spiral. Only get a lawyer if & when they get their lawyers involved.

@Dustyboots

www.bbc.co.uk/programmes/m000tmb4

It was on this program.

Are you sure you've posted the correct link? There's nothing on there about reocrded delivry letters about years of incorrect payments

@Helpmymum I can’t imagine the worry and stress you must be going through right now but please don’t. It’s almost guaranteed that your mum won’t have to pay this back. First of all, you should raise a formal complaint to the company about this explaining that it’s their error and they should have noticed it earlier. Also about your mums personal situation. You can say that due to her age and that she is a Widow that she is a vulnerable customer. This is actually true as defined by the FCA.

Once you have received a response to this complaint which will probably be them not accepting liability, you can escalate it to the Financial Ombudsman who I am certain will rule in your mums favour.

I work in financial services and have experience in rectification. We find issues caused by the company and redress customers. We have never reclaimed monies due to an error made by the company. If you want, you can privately message me a copy of the letter your mum received (please bank out any confidential information such as name, address and bank details first) and I will be glad to help you.

Try not to worry.

That should say BLANK out any confidential information!

Watching with interest.

@redcandlelight

sounds like a scam to me. look up the original company and call their number tomorrow. don't call the number on the letter.

She literally said she didn't call the number on the letter and checked Google.

Ifnitjidnmotnanscsm there
Must be some statue of limitations and there is no reason your mom ought to have questioned thisZbyou need legal advice, but I absolutely would not act quickly and assure your Kim the house will not be sold out from under her. I suspect the worst they could do is put a lien for some portion, but this is not your moms
Mistake

First establish it is not a scam. Then if it is true and your Mum does owe this money you could point out she has done nothing wrong and had a financial advisor. Then point out it was their error. Your Mum did not provide them with misleading information. Then suggest they write it off as a gesture of goodwill as your Mother is elderly and foes not have the money to repay it. The chances are they will just write it off.

Does mum have legal assistance on her home insurance? Absolutely do not enter a conversation on repayments, your admitting theft essentially. I believe your mother received this money in good faith and this is a massive cock up by the company. I would take it all the way.

I'd contact the company and clarify amounts, dates etc but then simply say your taking legal advice.

@Helpmymum I second what @mellicauli's husband said. I work in a legal setting and have seen this type of thing before. Do not worry or stress (easier said than done I know), this can and will be sorted out x

I agree: do what mellicauli’s DH says.

Go no further than fact finding with the company and certainly don’t enter into ANY conversation about repayments or acknowledge that any repayment even might be due!

Thankyou for all the advice & suggestions, I do feel a bit calmer about it now. I will report back when we get anywhere!

Good luck OP I hope you get it sorted and a good resolution for your mum.

@blisstwins

Ifnitjidnmotnanscsm there Must be some statue of limitations and there is no reason your mom ought to have questioned thisZbyou need legal advice, but I absolutely would not act quickly and assure your Kim the house will not be sold out from under her. I suspect the worst they could do is put a lien for some portion, but this is not your moms Mistake

The limitation period is 6 years.

Slightly amended version of pretty good wording suggested earlier -

Your position is “we have no idea what you are talking about, my mum has never knowingly received money she wasn’t entitled to and your letter has caused an elderly widow great distress. I suspect you have made an error in stopping payment. Please can you put in writing exactly what transactions you are talking about, as my Mum has a financial advisor who looks 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.

If they say they have sent previous letters say you are not aware of your mother receiving any as if she did she'd have spoken to her financial advisor. Ask for copies to be sent, by email if you have a junk mail you are willing to give them. However if they had sent previous letters I'd expect those to have been mentioned in the latest letter.

Do not admit anything on the phone because if she does she may have to pay back more than they can legally claim.

It sounds to me like it is the Financial advisor who has (at least some if not more) responsibility here.
They took out the bond and then cashed it in 5 years later.
What kind of product was it - if it was one designed to generate a monthly income - why cash it in ?
Presumably this would have incurred fees (income for the advisor?)
I think you need to examine the motives of the advisor - are they just churning your mothers money from one product to another just to generate business and earn income for themselves ?
I assume that if your mother is paying them for this service they are members of a professional body and have professional indemnity insurance.?

First of all I think you need to see confirmation of the bond being cashed, where and who the money was paid to and the amount, as well as the paperwork which was signed in regard to cashing the bond. Until they have provided that I would go with as far as I am aware we still have that bond and should still be receiving an income from it.

Don't panic. Possibly a scam; someone has gained access to DM's bank records and hit on one of her genuine regular credits. Knowing she's an older lady who might not be totally on the ball.

I would check that out with her bank's fraud department.

If it's a genuine error by either a financial company or DM's bank, I think the loss is theirs and they'll have to suck it up.

Update- although not much more detail. We have established today that it isn't a scam. We are waiting for an email response from the company to some questions (fact finding) that we asked over the phone. The contact person on the letter was not available to talk so we left a message. Financial advisor is still looking into digging out old records but it seems they are not liable for a number of different reasons including that my mum never mentioned to them she was receiving this money (she can't explain why, she is very confused and doesn't know herself). My sister has had a conversation with a solicitor friend today who has advised this is relatively common and not to open a complaint as it will drag on and we won't achieve anything from it. Best course of action would be to reply to the email (when recieved) stating that we have taken legal advice and as it was their error and mum recieved the money in good faith, has spent it and considering her vunerable position she would not be repaying any of it. And that we consider the matter closed. This apparently might be enough to warn them off but if not, next step would be to employ a solicitor to write a letter too. She thinks we shouldn't have to pay any of this back and they are just trying it on. They will probably know that and will back down eventually.

Any thoughts on that approach would be appreciated?

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.

I’d agree. Lob everything back into their court.