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

Try not to worry. I think it's likely that the company are going to have to write this off. It was their mistake.
Hope your mum is doing ok.

For what it's worth though, if your mum is really as confused as all this as she sounds, her IFA should be treating her as a vulnerable person. This would entail having someone else, such as yourself, at all meetings. Also, when factfnding, he should be asking about the source of this income.

Anyway, just a few things to think about once this is sorted.

Good luck, and try not to worry.

Sounds dodgy. Plus note ‘we have used the wrong details’. Their error I’m sure there’s a time limit on claiming back these types of things anyway. It’s their fault and it’s not unreasonable that your mum believes the money was rightly hers given the circumstances. Maybe post in legal for better help? If it’s not a scam , try MSE for help. Hand hold.

I'd follow your solicitor friend's advice once you have asked the company if tax was deducted from the payments or if they were made tax free. Depending on what other income your mother has there may be no tax liability but you will have to check on that, she clearly needs someone to help her with all this other than the financial advisor.

At the moment you have no proof of anything - when the bond was taken out and when it was sold, who bought and sold it (mum or through financial advisor) and what paperwork was sent to whom and when. If they made a mistake, they say, they could have made a mistake claiming the bond was cashed years ago. If they keep chasing your mother insist on seeing proof the bond was sold and the money was paid to your mother. Keep saying, in writing, your mother believed the money was legitimately hers, has spent it and does not acknowledge a debt exists. Warn your mother not to speak to them.

Legal policy wont help with a pre-existing problem but check any insurance she has, sometimes even a car policy has a legal advice line for anything as part of the policy cover.

I have heard (anecdotally) of cases where someone transferred a vast amount into another persons account. Turned out to be the wrong account/person. Bank requested them to give back the money and recipient refused.the case went to court. The court ruled that the recipient keeps the money since it was the sender's mistake. I'll try to find this story, it was online and really shocking.

This sounds like a massive headache OP. Great your mum has you to support her.

I like your idea of a response-except DO NOT mention a lawyer until they do. (If it gets that far).

They might have discovered their mistakes, written to all concerned and vainly hoped that some people would pay up.

Don’t do anything rash, except maybe review mums finances carefully to make sure she isn’t paying over the odds for anything through lack of switching for example.

One point about this is that knowing her age and presumably also knowing her status as a widow, they should have been more sensitive as to how they alerted her to this. You can't just dump this on a person on a Friday afternoon ESPECIALLY if the mistake is your own and not the person's. I'd make the most of the fact that they are handling this really badly.

@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.

Because if her original bond had been cashed in they should not have kept her details.

15 years is a long time not to pick up that sort of error and if she’s no longer an active customer they shouldn’t really still have active records for her, so it’s odd they do!

Oh, is that not a GDPR breach? Will be interesting to know how they tracked it back to your mum.

It been too long thats its historic.
The blame lie with the company.

@Moonstone1234

Going forward do you have Power of Attorney for your Mum. Older people are often too proud to ask for help and when I cleared out my Fathers home before he moved into a care home there were plenty of letters unopened, cheques for an accident he had in his car going back 20 years....etc

Some insurance company got off very lightly there in relation to car accident compensation.

Hope it all works out for you!

@Helpmymum I am glad your mum is talking about doing power of attorney. I would just flag that if she is beginning to be confused, you will need to do this quite quickly or it will not be possible to get someone to sign off that she has the capacity to understand it. (Have seen this problem a couple of times). Good luck!

It's been quite a while so you may be able to get some of it (at least) written off.
Definitely get professional advice.

Even if your mum owes it they can't make her sell her home. She would set a dd up for a monthly fee of lets say 40 quid.

@Roominmyhouse

How on earth did they figure out it was your mothers bank details on the other persons records? If we had the incorrect bank details on someone’s record at work we’d never know who they actually belonged to! Very odd. I’d ask for copies of all her records with this company personally and see what notes etc have been put on file. 15 years is a long time not to pick up that sort of error and if she’s no longer an active customer they shouldn’t really still have active records for her, so it’s odd they do!

It's probably worth making a subject access request for all the data they hold on her.

ico.org.uk/your-data-matters/your-right-to-get-copies-of-your-data/

Gosh that sounds worrying. I hope you manage to get something sorted out soon.

[quote Helpmymum]@AcornAutumn 70, I have never known her to or mention filing a tax return so my presumption is not but now you have said that I'm panicking that perhaps she is suppose to of and hasn't. Do you know how I could check this? [/quote]
Okay, not an expert...

if she files one or has been asked to, she will have received a demand from HMRC. She might have given the admin to the FA to do if so?

However, there is a small chance this has been missed, especially if she only owes a little bit.

It depends on her income and if tax is deducted at source.

Does she have any income from bonds, investments, shares, etc
Is her pension taxed.

Then that lot would all have to add up to over the personal allowance and then I think she would need to file a tax return

But tbh, i'd be flabbergasted if she owed tax to HMRC and hadn't heard about it.

Power of Attorney is currently taking The Office if the Public Guardian approx 12 weeks to turn around. It takes a while to get everyone to sign the bits they need to sign in the correct order, especially if you can't all meet up and things have to be mailed. I would start the process now if I was you. She needs to be signed off as capable to make the decision to appoint POA, so time perhaps is not on your side. I would suggest talking to her about a Health and Welfare POA as well as the Property and Finance POA. Forms available on .gov website. I hope you get it all sorted.

@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.

The FA should not be sending her documents to sign without her fully understanding what she is signing. It most definitely is his responsibility and job to ensure his client is fully aware of everything they sign and to always working in her best interest.

I worked in this area many years ago, dealing with complaint and compliance issues where financial advisers are concerned. It wasn’t in the uk though. Anyway, I would not just brush off the FA as having no responsibility. I’d be asking for a full copy of all his files in relation to your mum, she will probably have to make this request unless you have some form of authority to act on her behalf. If he’s be investing money on her behalf he should have been doing regularly meetings with her and review her financial position, including regular income, if any documentation he has on file shows that money going into her account, even a hand written note, he was aware. FAs are essentially sales people, he is going to protect himself especially when dealing with someone who is not financially aware.

An example of a case I worked on, this was an insurance claim, not investment. Client lodges claim for chronic illness, claim declined as client diagnosed the day after the policy was put in force, the type of illness is as such they must have has symptoms and rigorous testing before diagnosis, none of these were on the application form, in fact this 40 odd year old lady with 3 children had apparently never been ill, hospitalised or taken any form of medication in her life according to her application form. Forms are usually completed by clients themselves so clients can’t say but I told my adviser this. In this case the adviser did complete the forms, which he should never have done, he did it apparently because the client had a headache and her hand hurt. My company lost the case with the ombudsman as they ruled the adviser should have been on notice there was something wrong because the client had told him she had a sore hand. It turned out this adviser had been completing forms for years and not noting any medical history making our company liable for millions in payouts (he was solely contracted to us not an independent adviser) That’s just one of many cases with adviser incompetence.

I have POA for both my parents. You can do yourself which I did for £82 each. Solicitors will charge 3-4 times this but they will still need signing. It needs to be strictly signed in a specific order and think who your Mums certificate provider will be i.e GP or similar.

If your DM loses capacity it’s very difficult and time consuming to organise and costs £££

This sounds like a scam, and you need to do some investigation of the financial adviser's credentials.

You need to contact a solicitor.

@Magnificentmug12 - Just sounds like bullshit really. How can money go out for years and no one notice. How does a financial advisor also miss it.

Er, because a financial advisor has NO access to their clients' bank statements or accounts?! How would they know what money was going on or out??

What a sorry mess.

I'm not a financial advisor, but from what you have posted op, this is a fairly large company, THEY made an error, a monumental error, for what seems to be quite a long period of time.

If they are as large a company as you say they are they will have insurance to cover the cost of reimbursing the person who seems to also have been missing such a substantial figure for some time, a person who also has not queried as to why they are not receiving these payments. (Very bizarre)

As a pp has said, your mum may be liable to pay back the figure owed in small instalments, however It's almost impossible they will demand the full sum there and then resulting in her loosing her home/ savings etc as a result of THEIR error.

And if they try to bully you, you go directly to the Daily mail and publicly shame them, I'm sure they won't want their name trashed to the uk!

Remember this is their error, not your mothers. It isn't a one off windfall she has gone out and spent it's a regular monthly payment which no one seems to have realised isn't going to the intended person for a very long time!

@AliceMcK - 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

How would that work?? The FA has no access to any clients' bank accounts. How would they???

The financial institution made an error - eg typing one wrong digit in the bank account number. How is that the FA's fault ? The amount of disinformation on this thread is terrifying.

@littlebillie

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

But who else would the company contact??? They don't have contact details for clients' relatives, do they? Of course not.