Client was awarded budgeting loan but put wrong account details on application, so money was paid into a complete strangers account. This was 6 months ago and since then he has still not had money replaced and is repaying by deductions from benefit.
Bank have requested repayment but other person has not responded and bank's view is they can take this no further as it is not their error.

Am I right in thinking this is more an area of contract law than social security law, i.e potential small claim to force replacement? But then what about the issue that the DWP processed the application correctly and were not negligent etc.

Any ideas/ similar experiences greatly appreciated!

My gut feeling is that you are correct in thinking you are in small claims teritory - but on the other account holder, not the DWP. Niether the DWP or the bank acted in error. He can write to the other account holder via that person's bank. If no response I think you could serve a claim via the bank but to be on the safe side you should get the court's permission to serve in this way.

As client was getting a BL, I assume he is getting IS/IBJSA etc and would therefore be excempt from the court fee.

the DWP is aware that the claimant did not receive the social fund payment (which he is repaying!). why don't they replace it, and pursue the recovery from the person who has received money from public funds, who had no entitlement to it? (which is what they would have done if payment was by giro.)

payments into an account are an administrative matter - imo it matters less whether a mistake was made, and who caused it, than the fact that entitlement has been awarded, and the claimant hasn't received payment of the sum awarded. i don't think the DWP can use the payment arrangements to just wash their hands of any responsibility.

i'm not very technically au fait with how automated payments are made, but i wouldn't accept uncritically what the bank or the DWP say about the responsibility for the error being wholly the claimant's - they are adepts at denying their own responsibilities. assuming the error was in the account number, did the stranger have the same name and same branch as your client...?

your client could reasonably expect more help from the DWP than he has been given, who are much better resourced and legally empowered than he is. he may have difficulties in obtaining the information from the bank which he would need to pursue a claim against the recipient...

In this case, it appears that this customer asked JCP for a SF loan.
The customer gave the incorrect account details and then signed the form.
Contrary to ‘jj’s post, this is solely the customer’s responsibility and error.

JCP or the bank are not at fault- they have carried out the customer’s request.
JCP has made the payment, and is now recovering the loan as agreed with the customer.
Why should JCP, aka as the taxpayer, make another payment, or sort out the customer’s mistake?

I agree with SLoyd’s post- the customer needs to sort it out with the account holder.

If JCP was at fault in sending the payment to the wrong account, no doubt a replacement payment would have been sent to the correct account.

Nobody knows what arrangement the customer may have had with the account holder.
Nobody knows that the customer DIDN’T get the payment, or some of it, via the account holder.
Maybe this was an attempt to fraudulently to obtain 2 SF payments - some customers don’t always tell the truth.

Thats a bit harsh Mick! I agree that there is probably no duty on the DWP to provide a replacement payment but in the circs, and as this client is by definiation in poverty I think one would expect the DWP to at least be helping hte claimant a bit more. None the less direct action against the other account holder would probably be quicker and less hassle.

It must be great living in your world Mick, where no-one ever makes an innocent mistake and if they do, well tough luck. Your post reveals a mindset that suspects that each and every one of your "customers" is potentially a fraudster. Happy Christmas Scrooge.

Not much to add to SLoyd and Paul's posts but it must be so easy hiding behind the letter of the law and forgetting all about the spirit of the law.

Yes in any given case it could be attempted fraud. Equally, it could be an entirely innocent mistake. The point is that none of us know so we should be slow to express rash opinions until we have all the facts. The point about mindset is well made.

Just an extra thought, if a small claim against the other account holder becomes necessary you do have one advantage...you know their bank account details so if they don't pay up after judgement you can go for a third party debt order. Might prove to be quite good fun! (My new years resolution will be to get out more!!)

Mick

when responding to people's questions on this board, all i can ever do is assume that the advisor meant what they said in their provision of the facts, so i take "complete stranger" to mean complete stranger.

it has always been the case that the DWP is responsible for ensuring that a beneficiary receives the payment awarded to him - once he received his giro, it was his problem if he lost it. the DWP would also replace a damaged giro if you could get enough of it back to them to show it remained unnegotiated - so even if the claimant was eejit enough to put it through the washing machine in his shirt pocket, they didn't say bog off it's your own stupid fault, which they could do, if all that mattered is that they have issued an instrument of payment. what mattered is that a person actually receives the payment he is entitled to.

direct payments are promoted as being safer and better for customers, but a mistake over one digit can cause problems in the automated system. this actually happened to me when i started my current job - i was eejit enough to miss out a zero in a string of zeros, and my first salary payment was hovering in cyberspace - fortunately didn't go into somebody else's account, and once the error (mine, but it doesn't make me a criminal) was identified, the bank were able to locate it and sort it out.

the thing is, mistakes can easily happen, and anybody can make them.
mistakes can be recovered from, and what to do about them is the tester. to say that "it is the customer's sole responsibility and error" is not necessarily what one expects from a public service - though granted we don't always get what we expect. it's not necessarily accurate either - the claimant's error may have caused the overpayment, but blaming the claimant is not the whole of it - public money has still ended up in the hands of someone who's not entitled to it - so the DWP has a system that is not robust against customer error and has no responsibility? when did that happen? there is something so patently unfair in the idea of a person we can assume is on minimum income, repaying a loan he never received, that the bloody-minded approach (what most of us might expect from banks!) is unsatisfactory - making mistakes is what humans do - and public service, skilled in dealing with people and their multiple foibles and complexities, may still be expected to care in a way we don't expect from robots and machines. (the public may have to change its expectations, and so might public servants). they are in any event, expected to act reasonably.

i must add, i found your reference to " JCP, aka as the taxpayer..." quite extraordinary, and don't agree with it.

enuff said for 2006 from me, so merry xmas to everybody, and a happy 2007.

jj

Looks to me as if the unintended recipient has been unjustly enriched as a result of a mistake of fact and so JCP ought to be able to ask for the money back in a restitutionary action but it is a hell of a long time since I was an Equity lawyer: are there any practising lawyers out there who either know themselves or could ask a colleague about restitution - and whether the intended payee has a cause of action?

brigid

Yes Paul, it’s great living in my world, as it must be in yours. However, ‘my world’ is different to yours. Working for DWP/JCP, my simple definition of some of our roles are-
1.To pay benefit to those who are entitled to it according to the law.
2.To deny it to those who are not.
3.To protect the ‘public purse’.

Advice workers/centres are usually only involved in ensuring that ‘1’ happens. However, having said that, advice workers/centres are an important part of the benefit system’s ‘checks and balances’, but are rarely involved in either ‘2’ or ‘3’. Everyone makes mistakes - customers, advice workers/centres, and even ‘overpaid and under worked’ civil servants in DWP/JCP. OOPs- my mistake- I meant ‘overworked and underpaid’ – now that is a fact I can prove. Advice workers/centres wouldn’t be needed for benefit problems if DWP/JCP was right ALL the time!

However, my colleagues and I in DWP/JCP, have to consider 1, 2 and yes, 3. Attempted/potential fraud isn’t at the forefront of my mind with every claim, but it is certainly at the back of my mind with a small minority of claims that are referred to me by my team.
As I said earlier- ‘some customers don’t always tell the truth’ - something DWP has to deal with.
Like you, I’m a taxpayer too, and I expect DWP and all Government Departments to protect the ‘public purse’. I don’t want to have to pay any more in taxes than you do.
Last week for example, I was involved in protecting the ‘public purse’ with -
1.Stolen med cert completed by the customer- confirmed not issued by the GP
2.Altered med cert – overwritten in BLUE ink when completed by the GP in BLACK ink
3.Altered giro presented at PO – customer said it must have been the postman that altered it. A visit to Halfords and WHSmith’s for what’s needed, and a bit of skill on the way to the PO, is all that’s required to turn a giro into a ‘lotto win’.
4.Customer lied to his GP about his PCA appeal result- “No Dr… he didn’t win his appeal”
5.Good attempt by a customer trying to pass photocopied med certs as originals, which were held by his employer who was paying him SSP after all.
The above are some examples that were ‘spotted’ from one section, in one office, in one city, in one week. And in my world, the list goes on.

In relation to this ‘post’, I’ve heard about similar ‘mistakes’ on SF loan applications and ‘wrong accounts’ before -and I did qualify my earlier ‘post’ with the word MAYBE.
Another SF loan trick is for ‘A’ to provide ‘B’ with their ID details, ‘B’ completes and signs the SF loan form in ‘A’s name. A few weeks/months later when the loan is starting to be collected from ‘A’s benefit, ‘A’ disputes the signatures on the SF loan application form and cashed giro- he says they’re not his signature-which they aren’t. What fun the SF sections always have with cases like this.

Like anyone else, I’m sorry for anyone that has to repay a loan that they didn’t get.
Of course the money will have gone into a ‘strangers’ account in a genuine or deliberate error case. In a genuine error the customer won’t know the ‘stranger’. Anyone attempting this type of fraud will obviously deny they know the ‘stranger’.

The point I was making was that if you consider this case objectively, either way, you cannot prove or disprove, that this was a genuine or deliberate error. I accept that the information provided at the start of this post is at ‘face value’, but I don’t see how this customer can prove s/he didn’t get the loan. I could go on a lot further about as SF has a fixed budget, paying out ‘twice’ to this customer then denies other customers a SF loan - but I won’t!

The vast majority of claims we deal with, are accepted at ‘face value’, unless something ‘jumps of the claim form’ to suggest otherwise. At first glance, most of us, even including experienced fraud staff, cannot differentiate between a genuine claim and a fraudulent claim - that’s how fraudulent claims get paid.

Finally Paul, this Scrooge, as usual, laid on and paid for out of MY ‘purse’, a buffet for my team, to thank them for their hard work during a terrible 2006 - and I have the till receipt to prove it! Unfortunately, for my team and I, 2007 doesn’t look like it’s going to be much better.

Happy New Year everyone.

jj

A very well thought out and thoughtful post - i couldn't agree with you more.

Nicky

Mick

Firstly:

@Mick

'Like you, I’m a taxpayer too, and I expect DWP and all Government Departments to protect the ‘public purse’. I don’t want to have to pay any more in taxes than you do.'

But surely the point is we all pay much the same taxes if we have the same income? The cost of the fraud you suggest might havce, but don't know has, occured, wont come out of your pocket any more than it does out of mine, or any one elses.

Or is John Hutton's latest weeze to make DWP staff pay for any 'fraud' they fail to detact? That would explain the attitude of some Decision Makers I've encountered! Although I'm still continually amazed by the commitment shown by many hard pressed DWP frontline staff to make sure that claimants do get the money they are entitled despite the policies and blunders of the higher ups and the increasing pressure that they are put under to subject another group of tax payers (most claimants have contributed to the public purse at some time in their life, and astoundingly some still pay tax out of their benefits!) to humilitaion and unnecessary obstacles in the name of the 'public purse'.

One of the issues not touched on so far is that the scope for this kind of fraud (if that is what it is) and of the much greater level of accidental overpayments was much less when claimants received giros or order books yet the forced introduction of automated payments, was introduced in the name of 'protecting the public purse'. As were the cuts in JC staffing. the impact of which on your team you describe so clearly Mick. I hope you will be voting yes in the PCS ballot on industrial action later this month!

Paul

Is 'generous' Mick retaining his till receipt for a future benefit claim should he have to dispute an accusation of wilful deprivation of capital ?

Good God! I had no idea this post would generate such a heated discussion.

Just to bring you up to date - Social Fund are refusing to reimburse the customer but will issue a decision, which I will challenge through the normal review procedures - no doubt it will go to the SFI and we will have to see what they make of it.

I should have explained that the client put his switch card number down as his account number - a genuine mistake - but this happens to be someone else's account number. The chances of this being the account number of someone known to him must be a zillion to one.

As far as I can see the bank carried out the instructions given to them and cannot be expected to do anymore. A small claim would have to be made by the client or the DWP solicitor's ( which I have suggested ), but here we would run up against data protection as I am sure the bank cannot release the name or address of the recipient and therefore no claim could be served.

Any other ideas?

With regard to Mick's post - I really wish we could get away from this us/ them approach that some people take in the DWP with regard to advice/ law centres. For your information I routinely have to advise people that they are not entitled to benefit and in many cases where benefit has been awarded in error I have to advise client's to declare this as such. We act under the rules of conduct governing solicitors and take this seriously.

Also when I take instructions from a client I have to believe what they say unless it is clearly unreliable etc. I can and do test my client's evidence where it appears shaky as I am the one who will have to present the case at an appeal and I do not want to look stupid before other lawyers! But the basic principle of solicitors is that you take instructions given by a client, and if Mick ever has to consult a solicitor I am sure he will be grateful for this rather than a comment back such as " oh come off it, do you really believe that a court will swallow that one?

Cheers,

Carlos

Paul/Frank
I'll be on strike on 31/1 and losing a days pay (again).
However, I won't need my till receipt to try and apply for a SF BL, cos as an 'overpaid and under worked’ civil servant, I'm only now spending my 1997 pay!!

Carlos,
I think I mentioned in an earlier post that I belive you can write to the other account holder via their bank as long as you have the account numbers. I have had clients who have come to me for advice where they have been on the receiving end of this! Service of a claim would certainly be harder. Service via a bank does not fall into one of the recognised methods of service under CPR but you could ask the courts permission to serve in this way (see CPR 6.8)

Not having the other account holders name is not insurmountable. It is possible to issue proceedings identiyfing the defendant by description (e.g account holder of a/c xxxxx) rather than name provided the decscription given is sufficient to ultimatley identify them.(Bloomsbury publishing Group v News Group nespapers <2003> and Hampshire Waste Services Ltd v Persons Unknown <2003> )

Mick,

Go and have a look at this thread entitled "Just for Fun":

http://www.rightsnet.org.uk/dc/dcboard.php?az=show_topic&forum=108&topic_id=2346&mesg_id=2346&page=

and go and ask Iancity if you can borrow his shield for a while - he said it works You were making a reasonable point, so I don't see why it shouldn't work for you.

ps. To avoid myself having to borrow Iancity's shield myself, I will add, that you could have made your point a little more subtly. I did have the same reaction as others when I first read it.

I wish you the very best of luck with the strike - most WR workers probably support you - and Happy New Year!

Tony

Thanks SLloyd for that advice.

Just one final point to Mick then I'll shut up. With regard to the "public purse", in my experience our local DWP is unable to deal with many cases ( eg requests for backdating ) efficiently, resulting in us having to needlessly chase them all the time with follow up telephone calls, letters, threats of the ombudsman etc - and my time is paid for out of the legal aid budget, ie the public purse.

Having said that I do appreciate the pressures that you and your staff work under, but then so do I - and unlike our IB office which is based in Belfast, I have to see angry clients face to face.

Also with the new fixed fee system to be introduced by the Legal Services Commmission I will be expected to take on double the number of cases that I currently do for no extra renumeration for the Law Centre. We will also be limited to spending 3 hours on each case - by the time I have interviewed the client ( many of whom have mental/ physical health problems, language difficulty etc ), got a Legal Help form completed and obtained evidence of their income, justified taking on the case as having sufficient merit to warrant public funding, written them a letter to confirm their instructions and my advice, done the admin to open and log the case I will effectively have less than 1 hour to actually sort the problem out.

Happy New Year.

Can't really help with a solution and not re-opening the rest of the discussion...I just wanted to say thank you for posting this. I interviewed a cl and completed a SF form with him.....he was confident that he knew his bank details off by heart, but because of this post I wrote a caveat for the SF section to double check bank details with IS. Glad I did! Bank details were totally wrong so I narrowly avoided a cl with the same problem! Thanks

Hi
I know this was a long time ago, but can you remember the outcome of this case. I have just been presented with a very similar scenario and not sure what to do with it.

We took a case like the one described above to the Financial Ombudsman, complaining that J P Morgan (who run the Post Office’s banking arm) had failed to credit our client’s account in accordance with her instructions. One digit in the account number had been incorrectly entered on the claim form, but her instructions identified clearly enough the account she wanted credited.

The Financial Ombudsman has just upheld the complaint and directed J P Morgan to reimburse our client her money. The Ombudsman notes that at the time of the disputed transaction (Sept 06) the guidance of the Association for Payment Clearing Services said that if the name supplied did not match the account number, the name should take precedence.

It seems the guidance on this point was withdrawn in January 2007, reflecting the industry practice of using the number only. However, the Ombudsman does not treat the guidance as conclusive. His attitude seems to be that while it may make good sense to operate an automated payments system using numbers only, the banks do so at their own risk. The crucial point for him is that the bank had no mandate to credit an account other than the one our client had specified by name.

David