Paragon Asra Housing Limited (202105462)

REPORT

COMPLAINT 202105462

Paragon Asra Housing Limited

18 November 2021

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

The complaint refers to:
1. The landlord’s administration of the resident’s rent account.

Background and summary of events

The resident is a tenant of the landlord and resides in the property with a joint tenant named on the tenancy agreement. Both the resident and the joint tenant were initially assigned a housing benefit reference number by their local authority for their housing benefit payments. Another tenant of the landlord, who resided in another area, was provided the same reference number by a different local authority.
The evidence confirms that the resident and the joint tenant had been contacting the landlord throughout 2020 regarding their rent account and missing housing benefit payments. At one stage, the rent account was in credit and the resident requested a refund of this balance which was granted. Following this, it was found that several housing benefit payments had been mis-posted into the resident’s rent account. These were then deducted from the rent account, causing arrears on the account.
The resident contacted the landlord on 16 November 2020 to discuss the arrears on her rent account. The landlord explained that housing benefit payments from another tenant had previously been mis-posted to the resident’s account. The resident expressed dissatisfaction that she had previously received a refund for the credit on her rent account when this was not correct. Following this, the resident and joint tenant raised a complaint about the refund being issued which had resulted in arrears due to the error on the account. The resident agreed to a payment arrangement to re-pay the amount which had previously been refunded.
On 2 December 2020, the landlord responded to the complaint and offered £50 compensation for the stress and inconvenience caused. The resident advised that she would discuss the compensation with the joint tenant and respond.
In March 2021, the landlord’s records show that it identified that there had been a longstanding issue with regard to incorrect housing benefit payments being paid into the resident’s account and the resident’s housing benefit payments being made into another tenant’s rent account. The evidence shows that it queried the housing benefit payments made from each local authority at this time. The resident expressed dissatisfaction that the issue was ongoing and queried why she had not received the landlord’s previous compensation offer of £50 into her rent account. Around this time, the resident stopped receiving housing benefit and began receiving universal credit. The joint tenant still received housing benefit for 50% of the rent due for the property.
The joint tenant raised a complaint with the landlord in May 2021 as their housing benefit payments were not showing on the rent account. On 19 May 2021, the landlord responded and confirmed that the issue was caused by another of its tenants being issued the same housing benefit reference number by a different local authority. This had caused complications and it was attempting to resolve the issue by ensuring that the correct payments were paid to the correct account. It was currently waiting for a list of all payments made by each local authority so it was able to manually allocate the payments correctly.
The landlord contacted the resident and the joint tenant on 3 June 2021 and explained that it had now received the schedules of payments from each local authority. It had found that approximately £617 had been mis-posted and it would be completing a transfer into the resident’s account within two weeks. It said that it would also arrange for the previous £50 compensation to be paid into the rent account. It apologised for the confusion and confirmed that the outstanding balance would be correct following the transfer.
The resident contacted the Ombudsman on 6 June 2021 regarding the ongoing issues with the landlord’s administration of her rent account since September 2020. She said that she had been contacting the landlord to rectify the situation and the landlord advised that the situation had now been resolved. However, the landlord said there was now arrears that she needed to pay. The resident said that the amount paid by housing benefit should have been around £800 but the landlord has said this was around £600. She said that she had raised a complaint but had not received a response. She was also not able to view her statements for the previous year on her online account and wanted a record of all the payments made by housing benefit so she could assess the balance for herself. She said that the issues had affected her mental health as she was worried about debt and wanted compensation for the stress caused. She said that the landlord had offered £50, however the situation had not been resolved.
Following contact with the resident, the Ombudsman contacted the landlord detailing the complaint and asked it to respond within ten working days.
The landlord acknowledged the resident’s complaint on 11 June 2021 and said it would respond within ten working days. On 21 June 2021, the landlord apologised for the delay and issued its stage one complaint response to the resident. It explained the following:
1. It noted that the resident and the joint tenant had been allocated a ten-digit housing benefit reference number by their local authority. The other resident affected lived in another area and had been given the same housing benefit reference number by their local authority. This had resulted in housing benefit payments regularly being mis-posted since January 2020 through its automated payment system, which ‘read’ the housing benefit number and considered the payment to be correctly posted.
2. It acknowledged that the resident had reported this issue many times and adjustments had been made on each occasion. It noted that some of these adjustments had been done incorrectly and said that its income manager would be checking all transactions to ensure they were correct. It apologised that the issue had been ongoing for over a year and that no individual member of staff had taken responsibility or done anything to prevent the issue until recently.
3. It had asked each local authority to change the reference number but this request had been refused. It was now in the process of obtaining the schedules for the legitimate payments made by each local authority to each tenant and would review this when the information was received. This would ensure that it would not need to check individual payments moving forward.
4. It noted the resident’s initial complaint and noted that this was due to a different issue caused by the same mis-posting error. The resident had recognised that her rent account had been in credit so had asked for a refund. The mis-posting issue was then identified and the incorrect payment was transferred back to the correct account which meant that the resident’s account fell into arrears. The resident could not afford to pay the refund she had been given back and had complained. The landlord had set up an affordable payment arrangement and offered £50 compensation for the inconvenience. It said that there had been some misunderstanding and it had not heard from the resident as to whether she accepted the offer of £50 so this action was not completed.
5. In recognition of the inconvenience caused, the landlord offered the resident £100 compensation, which included the initial £50 compensation previously offered. The landlord confirmed that the resident could escalate the complaint if she remained dissatisfied with its response.
The resident asked for her complaint to be escalated on the same day for the following reasons:
1. She asked why this issue had occurred now when there had been no previous issues with her housing benefit reference.
2. She had been calling since September 2020 to report this issue and had been told that the issue was being dealt with but the landlord had never fully responded to her concerns.
3. She said that she had emailed the landlord back regarding its initial offer of £50 and had evidence of the email.
4. She did not feel that it was the responsibility of the local authority as they had always paid the landlord directly and it was the landlord’s responsibility to ensure that the payment reached her account. She expressed concern that the local authority had paid approximately £800 into the account but the landlord had said that this was £616.
5. She had asked for her rent statements but had not been provided with these and the landlord had not explained what the current balance on the account was and how it came to that figure.
6. She added that the landlord had not taken any responsibility for the effect the issue was having on her or the joint tenant’s mental health. She felt that the issues she had raised had not been addressed and that the landlord was trying to blame the local authority rather than taking responsibility for the issue.
The landlord issued its stage two complaint response to the resident on 9 July 2021 and explained the following:
1. It acknowledged the resident’s comment that this had not happened before and explained that the issue had arisen when another local authority had generated a housing benefit reference number for a different tenant and that this was the same reference that the resident’s local authority had generated for the joint tenant. Its automated payment system identified this reference as relating to a particular tenancy in order to transfer the payment into the rent account. This had led to some payments being posted to the wrong account. This had only been an issue since the other resident began to claim housing benefit and was provided with a reference number already in use.
2. It acknowledged that the resident had received poor customer service and apologised. It noted that each time the resident had reported the issue the member of staff dealing with her report had assumed it was a one-off issue without going through the notes or identifying the systemic issue. It had checked and found that the resident had emailed it back regarding the initial £50 payment but this had been overlooked. It apologised for the inconvenience caused.
3. The landlord acknowledged that the issue was not the fault of either local authority as they could not be aware of the impact of this being a duplicate reference number for another tenant also claiming housing benefit from a different local authority. The landlord said that it was disappointing that neither local authority was prepared to change the reference number as this would have resolved the issue.
4. It said that it had now tracked the transactions against a schedule of payments that the local authority had sent and was now confident that the rent statement and balance was correct and that all housing benefit payments that had been made were now in the resident’s rent account. It had now created an IT solution which it hoped would prevent the issue moving forward. It would not be certain that this had worked until it received the next set of housing benefit payments for the joint tenant and the other resident. It said it would check both accounts at the end of that month to confirm that the problem had been resolved. If there remains an issue, this would be addressed. It said it would contact the resident in early August with an update.
5. It attached a rent statement and apologised for the earlier omission. It apologised for the impact and stress caused to the resident and the joint tenant. It confirmed that it did not purposefully cause issues and had attempted to put things right on each occasion.
The resident referred her complaint to this Service as she remained dissatisfied with the landlord’s response and wanted reassurances that the balance on her rent account was correct. She was also dissatisfied with the landlord’s offer of compensation and wanted £2000 to put the rent account back in credit and to acknowledge the lack of communication and impact on their mental health.

Assessment and findings

Scope of investigation

The resident has said she considers that the issues affecting her rent account have impacted her mental health. The Ombudsman does not doubt the resident’s comments. However, it is beyond the expertise of this Service to make a determination on whether there was a direct link between the issues with the rent account and the resident’s health. The resident therefore may wish to seek independent advice on making a personal injury claim if she considers that her health has been affected by any action or lack thereof by the landlord. Whilst we cannot consider the effect on health, consideration has been given to any general distress and inconvenience which the resident and her co-tenant experienced as a result of any errors by the landlord.

The landlord’s administration of the resident’s rent account.

In line with the tenancy agreement, the resident and joint tenant are jointly liable for making sure that the rent is paid in full and liaising with the local authority regarding any benefits they receive. The landlord would be responsible for making tenants aware of any arrears on rent accounts and ensuring payments are applied correctly.
In this case, the landlord has acknowledged that each time the resident had reported that her housing benefit payment had not been applied to the rent account, the member of staff dealing with her report had assumed it was a one-off issue without going through the notes or identifying the systemic issue. It attributed this to poor customer service and apologised for any inconvenience caused.
It took reasonable steps to attempt to resolve the matter by contacting the separate local authorities and asking them to change the housing benefit reference numbers for both parties to prevent future issues. When these requests were declined, it then took reasonable steps to introduce an IT solution which would ensure that the correct payments were paid to the correct account. The landlord has reported that the IT solution in place was working as expected and this would prevent any future mis-postings.
Whilst it is not disputed that there had been incorrect postings to and from the resident’s rent account, the resident and the joint tenant would ultimately be responsible for ensuring that the correct rent payments were paid in line with the tenancy agreement. As such, the landlord would not be expected to refund or credit the rent account with any rent payments that are owed under the terms of the tenancy despite the confusion surrounding the arrears and outstanding balance. There is no other evidence to suggest that the resident or the joint tenant were unable to use the property during the period in question. As such, they would be responsible for paying the rent during this period. and paying back any refund of rent which had been granted in error. The landlord has acted in line with the terms of its income management policy by allowing a repayment arrangement to be set up for the outstanding balance.
The landlord has acknowledged that both the granting of a refund in error and its failure to identify the systemic mis-posting issue were likely to have been inconvenient for the resident and the joint tenant. Where there are admitted failings by a landlord, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the circumstances. The landlord acted fairly in acknowledging its mistake and apologising to the resident for the inconvenience caused. It put things right by reviewing the payments made by housing benefit into each account and adjusting the accounts accordingly to ensure the balance was correct. The landlord demonstrated that it learnt from outcomes by changing its procedures to avoid making similar errors with housing benefit mis-postings in the future.
However, the landlord’s offer of £100 compensation in recognition of the inconvenience caused to the resident is not considered proportionate to the impact the issues had on the resident and the joint tenant in line with the Ombudsman’s remedies guidance. The guidance states that compensation in the range of £50 – £250 is appropriate in instances of service failure which had an impact on the resident but may not have significantly affected the overall outcome. Amounts on the higher end of this scale are more appropriate for instances of service failure where a resident has to repeatedly chase responses or seek correction of mistakes, necessitating in an unreasonable level of involvement in finding a resolution. In this case, the issue was ongoing for over a year and the resident needed to continually report the issue until it was identified and resolved. As such, it would have been appropriate for the landlord to have offered a higher level of compensation.
Furthermore, as part of her complaint, the resident requested her rent statements and a copy of all housing benefit payments received from the local authority for her account. It is clear that the resident disputes the current balance on the rent account. Whilst the landlord has provided the resident’s rent statement, it has not provided the additional information she requested regarding the schedule of payments made by the local authority. This is likely to have caused further uncertainty as she has not been provided with evidence to confirm that the balance on the rent account was correct.
In summary, there has been service failure by the landlord in respect of its administration of the resident’s rent account. Whilst the landlord has made reasonable efforts to rectify the underlying problem with the rent accounts, the compensation offered by the landlord was not proportionate to the impact its failings had on the resident and the joint tenant. Furthermore, the landlord has not provided the resident with the information she requested regarding the scheduled housing benefit payments into her account. As such, the landlord should offer additional compensation to the resident, which may be paid into the resident’s rent account at the landlord’s discretion. The landlord should also provide the requested information within four weeks.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its administration of the resident’s rent account.

Reasons

The landlord has made reasonable efforts to rectify the underlying rent account issue by identifying the problem and implementing an automatic solution. However, the level of compensation offered by the landlord was not proportionate to the inconvenience caused to the resident and the joint tenant during the period in question. The landlord also failed to provide significant information regarding the schedule of payments received from the local authority during the period in question which is likely to have caused additional inconvenience and uncertainty.

Orders

The Ombudsman orders that the following actions take place within four weeks:
1. The landlord is to pay the resident £150, comprised of:
  1. £100 as previously offered if it has not already done so.
  2. An additional £50 in view of the distress and inconvenience caused (these payments may be paid to the resident or directly into the rent account to offset any arrears at the landlord’s discretion).
2. The landlord is to provide the resident with a copy of the scheduled housing benefit payments made by the local authority to her rent account from January 2020 onwards for further review.