The Guinness Partnership Limited (202202467)

REPORT

COMPLAINT 202202467

The Guinness Partnership Limited

31 March 2023

Our approach

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 is about:

The landlord’s handling of the resident’s rent account.
The landlord’s use of a third party rent payment system.
The landlord’s handling of the resident’s complaint.

Background

Legal and Policy Framework

The landlord has a complaints policy, in which it defines a complaint as an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the landlord, its staff, or those acting on its behalf. It also states that if a resident tells the landlord they want to complain, it will always record it as a complaint. Stage one complaints should be responded to within 10 working days, and stage two complaints within 20 working days. If extra time is needed to investigate it will be specified.
Gov.UK guidance on Universal Credit and rented housing: guide for landlords, sets out the terms for Alternative Payment Arrangement (APA) and requests for managed payments to landlord from the Department for Work and Pensions (DWP). If a tenant has accrued rent arrears to the value of two months’ rent or more, their current landlord can request payments direct, of both the housing costs of the Universal Credit award and a rent arrears deduction. This is in place to safeguard the claimant’s home.
The landlord has an arrears policy to support rent collection, it says:
1. We aim to recover rent, and other arrears as quickly as is reasonably possible. We will take income and individual circumstances into account to ensure repayments are affordable, and always try to help the tenant to sustain their tenancy.
2. Where payment is not made, we will get in touch to find out the reason why payments have been missed. Our aim is to ensure that repayments are re-established as soon as possible.
3. If satisfactory repayments are not made, we will assess whether there is good reason for this. We will continue to support tenants where there is evidence of a genuine commitment to work with us to clear the debt.
The resident’s tenancy agreement states that monthly rent payments must be paid in advance, on the first day of each month.

Summary of events

The resident has held an assured tenancy with the landlord, for a bedsit on the third floor of a block of flats, since 31 March 1997.
The resident’s usual payment method for paying his rent to the landlord was to use a personalised rent payment swipe card, provided by the landlord’s third party payment provider.
On 7 January 2021, the landlord sent a ‘missed payment letter’ to the resident advising that his account was showing £677.30 arrears, which needed to be cleared. Arrears letters from the landlord are sent by post and emailed to residents if they have an email address.
The landlord did not receive a response from the resident, so it wrote again, on 18 January 2021. The landlord advised the resident that the arrears had risen to £868.52. The letter stressed the importance of paying to prevent further action or to let them know if he was struggling to pay the rent.
On 27 January 2021 with no response to either letter from the resident, and the account eight weeks in arrears, the landlord exercised its right to make an alternative payment request (APR) to the Department for Work and Pensions (DWP). The landlord requested a managed payment to landlord. This meant that, the rent element of the resident’s universal credit, would be paid direct to the landlord plus an additional sum, deducted monthly to pay off the arrears.
On the 19 February 2021, the landlord wrote to the resident for a third time. The letter said, that despite its attempts to contact the resident, the amount outstanding was seriously overdue, and it was going to prepare a case to request a money judgement from the county court.
The resident responded to the landlord on 20 February 2021. His response in summary said, that this and other recent emails had gone to his unchecked ‘junk mailbox’. He did not understand why the account was in debt, as he had made regular monthly payments to the landlord, the last of which was on 24 January 2021 and a further payment had recently been paid directly by the DWP. He requested copies of the last five years rent account statements as he believed his account should be in credit.
On 23 February 2021 in response, the landlord contacted the resident for security information to access his rent account, and the following day it sent him a rent statement. The landlord also asked the resident to confirm his payment method and whether he could provide proof of payment to help the finance team locate any payments that had not been posted to his account.
The resident emailed the landlord on 27 February 2021, with copies of the last years payment receipts (Jan 2020 – January 2021). In his email he requested the additional four years statements as the landlord had only provided one. He also advised that whilst looking for the rent receipts he had found some un-opened post which included the arrears letters the landlord had previously sent.
On 11 March 2021, the landlord started a missing payments investigation with their third-party payment company.
The resident contacted the DWP and advised them that he had provided the landlord with proof of payment, so he would like the direct payments stopped. The DWP told the resident on 16 March 2021, that his request to have rent payments and arrears direct stopped, had been declined by the landlord, as the resident has a “history of rent arrears”.
On 16 March 2021, the payment company told the landlord that the rent payments had been located, they were made using a payment card for a different organisation.
The resident wrote a formal complaint on 2 April 2021, to the Landlord’s Chief Executive Officer (CEO). In the complaint the resident said:
He had been asked for security information when requesting his tenancy agreement, the same information he had provided the day before for his rent account.
He wanted the direct payment from the DWP to be terminated as the £408.29 for rent and £81.98 for arrears was a result of a mistake. He had provided photographic evidence of payments he had made to the landlord.
Payments he had made on August 2020 and December 2020, had also previously gone missing, the landlord’s staff had advised him this method of payment was being phased out as they had had so many payments go astray.
The resident disputes the claim made by the landlord to the DWP that there is a history of rent arrears on his account. He provided examples of the only time that arrears have been on his account, and these were down to late payment by the Council’s Revenues and Benefits team, an unwanted credit refund and payments made, but not posted to his account.
This complaint was acknowledged on behalf of the CEO on 6 April 2021. In the acknowledgement the resident was told that the landlord takes all complaints it receives seriously and hoped that the issues raised could be resolved as quickly as possible; it would be passed to the complaints team for investigation.
The complaint was not formally logged, but the landlord’s Complaints Manager sent email responses on 7 and 8 April 2021, which said:

a. For any new customer email received, advisors will request security information in the interests of data protection.

b. A manager had reviewed the email request for direct payments with DWP to cease and would be happy to discuss and make other payment arrangements if they could call him.

c. When the DWP process payments for the Personal and Housing Element of Universal Credit, this is usually payable in arrears. It also advised on how to obtain financial support and advice.

d. It requested more details from the resident around the complaint about the customer accounts team behaviour.

On 10 April 2021, the resident responded to the landlord’s emails of 7 and 8 April 2021. He expressed his dissatisfaction with the landlord’s response, re-iterating that his preferred method of contact had already been expressed as written not telephone. The email was not new it was a response, so should not have required more security information. He did not want to keep going back and forth with the landlord, he just wanted the landlord to immediately resolve the ongoing issues he had raised in regard to the DWP direct payments and reimburse all arrears payments from the DWP since 27 January 2021.
On 20 April 2021, the landlord contacted the DWP to cancel the managed payments, as the resident’s account was no longer eight weeks in arrears.
The landlord has said it remained in contact with the resident’s council to assist in the recovery of the rent payments that had been made to his council tax account. It chased the council on 20 January 2022 for the misallocated payments, but they did not respond until 18 March 2022 when they had processed a refund of £1068.18.
The refund from the council put the resident’s account £629.70 in credit.
On 4 May 2022, the resident sent another complaint to the Landlord’s CEO, this was referred to the complaints team and logged as a stage one complaint. In summary the resident said:

a. Following the council tax department’s reimbursement to the landlord of £1,120 misallocated rent payments, he formally requested immediate reimbursement of the sum of £245.94. To be paid to the same bank account he used to pay his rent.

b. The landlord would have known to reimburse the DWP direct payments of £245.94, the moment it cleared on 15 March 2022, from the Council tax Department, yet it had chosen not to.

c. He reiterated the history with the payment system, and how his account had been dealt with, as set out in his earlier complaint of 2 April 2021.

d. He also asked to know what had happened to his earlier formal complaint acknowledged by the CEO’s personal assistant on 6 April 2021.

In regard to the suggestion that, ‘payments go astray’; complaint investigation notes from the landlord, explain that its payment system with the provider, works on a swipe card. Occasionally the card will not swipe, which then relies on the pay-point outlets staff, having to enter the payment reference manually. Sometimes it is entered incorrectly, and the payment does not go directly to the account. It can however be traced and then posted to the account, which has happened to the resident’s payments in the past.
The landlord acknowledged the resident’s complaint on the 5 May 2022 advising the resident that for context, “your previous emails were not logged as a complaint since you were being contacted directly by our Customer Accounts Manager, therefore we hoped that this would be resolved before the need for a complaint “.
It provided a stage one response on 20 May 2022. In its response the landlord said:

a. The resident previously made rent payments using a payment card via pay point terminals. It had received payments from the resident’s payment card until 16 November 2020. It had not received any further direct payments via that method until 12 May 2021. The account subsequently, fell into arrears due to none receipt of payment.

b. It explained it had contacted the Department for Work and Pensions (DWP) to request that the payments for the resident’s rent were paid directly to it, to prevent the account falling further into arrears.

c. It later found out it had not received the payments during this time due to the fact the resident had used his Council tax payment card, rather than his rent payment card.

d. It was not the landlord’s policy to automatically issue refunds as many customers prefer a credit to stay on the account. It had since issued the refund.

e. It does not have any concerns with the actions of its staff, they will continue to ask security questions to safeguard information.

The resident escalated his complaint on 28 June 2020. It stated he paid rent on a council tax payment card, which he does not have. The landlord had not adequately explained why after receiving an acknowledgement to his formal complaint from the CEO on 6 April 2021, he had to formally complain again on 4 May 2022. It has not adequately dealt with his complaint that his rent account was misrepresented to the DWP.
The landlord completed a stage two complaint review, allocated to an independent officer, and sent a response to the resident on 22 July 2022. In summary the response said it did not uphold the complaint and provided the same reasons set out in the stage one response.
The resident has since changed his method of rent payment from rent card to direct debit.

Assessment and findings

Scope

The resident raised with this service on 4 May 2022 an issue with the landlord refunding a credit from his rent account that he had asked to remain on the account, in 2019. This issue does not form part of this investigation because, there is no evidence this complaint was brought to the attention of the landlord within 6 months of the matter arising which the Ombudsman considers to be a reasonable period to make a formal complaint.

Assessment

The Landlords Handling of the Rent Account

When the landlord had not received the resident’s rent payments for December 2020 and January 2021, it was appropriate for it to try and contact the resident. The arrears letters sent in January 2021, were not intimidatory in content or tone. They reasonably sought to alert the resident that his account had gone into arrears, in line with the arrears policy, and to request contact if he was struggling to pay. They were sent at reasonable intervals to give the resident time to make contact or clear his account. Both letters and emails were sent to the resident to mitigate against the consequences of non-receipt.
When no payments were forthcoming on the account, on 27 January 2021, the landlord was within its rights to request payments direct from the DWP. In accordance with Government guidelines, an alternative payment arrangement can be requested by a landlord if the account is two months in arrears, which it was on 27 January 2021.
Having received no response from the resident to its previous contact it was appropriate for the landlord to escalate the rent arrears recovery process and it advised the resident in its third letter that it was preparing the case for court.
In February 2021, the resident said the landlord’s emails had gone to his junk mailbox, which he rarely checks, so in effect he had only just received them. The landlord, however, had also sent the correspondence in the post to mitigate against this. The resident had later found the letters un-opened and this was not a failing of the landlord. It had used two methods to contact the resident and could not reasonably be expected to have done any more.
When the landlord became aware on 27 February 2021, that the resident had made payment which had not reached the account, it was proactive in contacting the payment provider on 11 March 2021, and investigating what had happened to the payments.
It was understandable for the resident to assume that the landlord’s payment system was at fault; particularly as he had experienced previous problems, where his payments had not been posted to his account, resulting in the landlord having to have the payments traced.
The payment provider advised the landlord that the payments had been made using a payment card from a different organisation. The landlord was entitled to rely on the findings of its payment provider, who had the knowledge and means to track and trace individual payments.
It is not clear how or when exactly, but further analysis by the landlord and payment provider, identified the payments had been made to the resident’s council tax account. This has been confirmed by correspondence provided to this service, between the landlord and the council tax department, in relation to recovering the payments.
This was further supported by copies of the resident’s payment receipts as each account has a unique reference number. The resident’s unique number for his rent account payments can be seen on all the resident’s payment slips, provided up until, 16 November 2020. The payment slips for the rent paid December 2020 and January 2021, (that went missing), have been paid using a different unique reference number.
Looking at the payment slips, this does not appear to be an in-putting error, as it was a completely different unique reference number. The same number has been used for both payments made on different dates sending the amounts paid to the resident’s council tax account. It was appropriate for the landlord to explain this and how the payment system works to the resident, to give him a better understanding.
When the DWP approached the landlord to make the resident’s request to stop the direct payments, it was not unreasonable for it to decline the request. At this point in time it was clear the resident had not intentionally failed to pay his rent, but the account was still in arrears and as such the landlord was entitled to continue with payments direct from the DWP.
It was not helpful however, for the landlord to inform the DWP the reason was because the resident “had a history of rent arrears”. Direct payments can be arranged for a history of continuous under payment, but that was not the case in this instance and it was understandable that this comment caused the resident some distress.
Once the error was identified, although it was not at the fault of the landlord, it acted fairly in assisting the resident in the recovery of the payments from his local authority.
It took a year to recover the payments; the resident had provided evidence to the landlord that he had made payments in good faith and a mistake had occurred. As a low-income household, this would clearly have caused the resident some financial hardship. In both of its responses the landlord indicates that it does not automatically refund credits; in this case it would have been more helpful to make an exception, in recognition of the length of time it took to retrieve the payments and as the resident had already paid the rent, albeit into a different account.

Landlords Use of a Third-Party Payment System

In his formal complaint the resident raised a concern about the landlord using a payment system, in which payments can knowingly go astray.
This type of third party payment system is offered by many different organisations to collect charges, including local authorities, utilities companies and other housing providers. The landlord’s reasons for using it is to provide a method of payment for residents who want to make over the counter payments, particularly cash payments. Residents have a choice of local Pay–Point outlets to use, which are conveniently situated in local high street shops, retail outlets and Post Office branches around the Country.
Whilst the landlord is aware the payment system is not failproof, most payments are successful, and those that are not, can be traced and re-directed. It was therefore, inappropriate for the landlord to provide this service; it is not the only payment method available, and it gives resident’s a choice, particularly those who do not have access to a bank account.

Landlord’s Handling of the Resident’s Complaint

A number of email exchanges between the parties happened in February and March 2021, in which the resident questioned the landlord’s calculation, and disputed that his account was in arrears. This correspondence was appropriately treated by the landlord as a service request, which resulted in an investigation into what had happened with the resident’s account.
On 2 April 2021, the resident wrote to the landlords CEO setting out clearly his dissatisfaction with the service. The CEO’s office accepted the resident’s complaint, advising him all complaints are treated seriously and passed it to the complaints team to investigate. The landlord’s complaints policy states, if a customer makes it clear they wish to complain, then the matter will be logged as a stage one complaint. The landlords complaints team then failed to log the complaint, or take it through the stage one process, which was not reasonable or in line with its policy.
Whilst a member of the landlord’s complaints team sent two emails to the resident on 7 and 8 April 2021, they only provided outline information and signposted the resident to other parts of the organisation. This falls short of the Ombudsman’s expectations for a complaint response as set out in Paragraph 5.8 of the Housing Ombudsman’s Code; it did not answer all aspects of the complaint or provide an appropriately detailed response.
The resident went onto express his dissatisfaction with the response. He highlighted areas of the content that were incorrect and set out the resolution he wanted. There is no evidence from the landlord that this was escalated as per the landlord’s complaints policy or evidence that the complaint was progressed. This is proof again, of the landlord not following its complaint process.
The landlord said to the resident on this issue, that the resident’s previous email complaints “were not logged as a complaint because they were hoping the direct contact with the Customer Accounts manager, would resolve the need for a complaint”. However, this does not align with the landlord’s complaints policy and it is evident that resident was trying to make a formal complaint which was not resolved at the time.
In March 2022, when the landlord did not automatically refund the credit; the resident submitted another formal complaint via the landlord’s CEO.
The complaint was predominantly about the credit not being refunded when it was received; but he also wanted to know why he did not receive answers to his previous complaints about the payment system, the refusal to stop direct payments to DWP and his objection to be labelled as “having a history of rent arrears”.
The landlord appropriately acknowledged receipt and logged it as a stage one complaint, in time and in line with its complaint handling policy. The landlord’s complaints policy states that stage one complaints will be investigated and responded to in 10 working days from receipt. The complaint response exceeded the target time by 4 working days, with no notification that additional time would be required to investigate. The landlord did not acknowledge or apologise for this failing in its response.
The stage one response provided a chronology of events surrounding the circumstances that led to the residents account accruing arrears, action the landlord had taken to track the missing payments and the eventual resolution. It did not however provide an explanation for his previous complaint not being logged and did not establish that his complaints about customer service and staff behaviour had been properly investigated.
The second stage response, was more or less a repetition of the stage one response, and did not demonstrate that any significant review had taken place or that the landlord had fully grasped the reasons for escalation. The landlord did not address the specific escalation points raised, and did not provide sufficient or thorough explanations as set out in earlier findings in the report.
The response also said it found no fault in the conduct of its Customer Services Team, however it relied on the summary of events to support this finding, it did not actually explain to the resident how and why it came to this conclusion.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in respect of its handling of the residents rent account.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in respect of its use of a third party rent payment system.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord in respect of its complaints handling.

Reasons

In respect of the handling of the residents rent account, the landlord adequately demonstrated that it had followed its arrears procedure, implementing it in a timely manner with a fair and reasonable approach. Two issues were identified that could have been dealt with better, but they were not significant service failings, and addressing them would not have significantly changed the outcome for the resident in this instance.
In respect of the landlord’s use of a third party rent payment system; the system may not be fail-proof, but any problems can be quite simply resolved, and this must be balanced against providing a rent payment service that is accessible for and provides choice to all residents.
In respect of the complaint handling, the landlord did not treat the resident fairly by its failure to investigate the initial complaint, in accordance with its complaint handling policy. Whilst the landlord did investigate the complaint submitted in 2022, it failed to meet the response time or demonstrate that it completed a thorough complaint review, missing opportunities to address earlier mistakes and repair its relationship with the resident.

Orders and recommendations

Orders

The Ombudsman orders that the landlord should pay the resident £350.00 compensation, consisting of:

a. £100 for not investigating the original complaint at stage one.

b. £100 for not escalating the original complaint to stage two.

c. £ 50 for failing to meet the stage one response timescale.

d. £100 for failing to demonstrate a thorough review at stage two.

Comply with the above orders within four weeks.
Within 12 weeks, review your complaints handling policy to ensure that it identifies and logs formal complaints in accordance with the Ombudsman complaint handling code.

Recommendations

The Ombudsman recommends that the landlord review its policy to not issue automatic refunds, to ensure residents are not left in financial hardship by retaining credits unnecessarily.