Mr V's complaint about The Pension Service
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In Mr V’s case, although the original error was relatively small, The Pension Service’s handling of his complaint was so poor and so lacking in customer focus that they managed to turn a minor mistake into a significant problem, interrupting the payment of Mr V’s pension and causing him a great deal of frustration.
Background to the complaint
In 2004 Mr V, who lived in Hong Kong, began receiving his state pension, paid monthly and direct into his Hong Kong bank account. In August 2005 Mr V wrote to tell The Pension Service that his HSBC bank accounts would soon transfer from Hong Kong to Macau. The Pension Service acknowledged his letter, but input the account details incorrectly using a Hong Kong code. (Electronic transfer payments to Macau were not possible; had the officer used a Macau code the system would have recognised this and not allowed payments to be issued in that form.) In October Mr V wrote to The Pension Service again as no payments had been made into his Macau bank account; he gave his account details again and details of a separate Hong Kong dollar account (in case the currency being used was causing the problem). The Pension Service acknowledged his letter.
In November and December 2005 Mr V wrote two further letters to The Pension Service; he asked for a reply and said he had received no pension payments since August. In December The Pension Service wrote to Mr V and said that a payment to cover the period from 8 August to 27 November would be made direct to his HSBC account. Mr V said that he did not receive this letter. In late December Mr V received a letter from The Pension Service (dated 6 December) about direct payment. He replied the next day and said that his bank in Macau could see no reason for the payment problems and that he received electronic transfer payments from other agencies without difficulty. He suggested ways to overcome the problems but said, if they did not work, they could send him a cheque.
In January 2006 Mr V emailed the ‘Centre for non-residents’ section of HM Revenue & Customs’ website, complaining about The Pension Service. They forwarded the email to The Pension Service. Mr V then emailed The Pension Service direct. In the meantime, The Pension Service had suspended the payments due to Mr V (in line with their normal procedures where automatic payments are returned). In February Officer C, at The Pension Service, replied to Mr V’s emails and said that two payments had been issued on 19 January. Mr V replied, saying he had no evidence of any payments reaching his account and added ‘This matter is so frustrating and depressing I could weep’. Officer C emailed Mr V to say that he had received technical advice to the effect that electronic transfer could not be used to Macau, that payments could be made by post to Macau and that the payments previously issued to Mr V had shown up as returned. The same day The Pension Service wrote separately to Mr V to say that his HSBC account in Macau had been sent a payment of £1,298.36 covering his pension from 8 August 2005 to 19 February 2006.
In March 2006 Mr V received The Pension Service’s letter, but his bank had not received any payments. Mr V emailed Officer C to query this: he said that the depression and stress caused by this matter was harming his health. Ten days later Mr V sent a further email to Officer C referring to his emails being ignored and asking whether the money he was owed would ever be paid. Also in March, The Pension Service issued a further payment of £185.48 (for the period 20 February to 13 March). In April a different officer, Officer D, emailed Mr V and said that a payment of £1,298.36 had been issued on 17 February and a payment of £185.48 had been issued on 13 March. She asked for confirmation of receipt of the first payment so they knew the details were correct for the second. Mr V replied to Officer D, acknowledging receipt of two copies of Form IPC152 (which claimants complete to confirm that a payment has not been received). He also said that: HSBC Macau had received two cheques for £1,298.36; they had been sent for collection to the UK on 14 March and returned without payment by The Pension Service; HSBC Macau had sent the cheques for collection again on 29 March; HSBC had not received an order for £185.48; amounts could be credited direct if they were made payable to HSBC (Macau); he had incurred a fee for each collection; and he would not be returning the IPC152 forms in case that led to cancellation of cheques that might still be in the system.
The Pension Service have no record of receiving any further letters or emails from Mr V from this point on. However, Mr V emailed Officer D in late April to explain that his Hong Kong dollar account had been credited with £1,289.36 and his sterling account with £1,308.36 (which he believed resulted from a duplicate payment order). He said also that HSBC had charged him fees totalling £14.25 for two deposits and a £10 cancellation fee when The Pension Service had countermanded one of the duplicate payments. He asked if his pension could now be paid to HSBC Macau without duplication.
In late May 2006 Mr V emailed Officer D to say that his bank statement showed no payment since 10 April and no sign of the payment of £185.48. He questioned the lack of replies to his emails and asked what was happening to his pension. He emailed Officer D in June asking why payments had stopped. Between 18 July and 8 August Mr V’s bank in Macau received four separate payments of £185.48. On 9 August the Ombudsman received a referral of a complaint from Mr V from a Member of Parliament, and accepted the complaint for investigation in September. In late September The Pension Service wrote to Mr V, apologising for the delay in his case, naming an officer for him to contact and explaining that they had continued to send his payments to Hong Kong instead of Macau and that they had, from February 2006, made all payments by payable order. Mr V did not receive this letter. In November The Pension Service awarded £100 to Mr V by way of apology because the service they provided had fallen short of their usual standard, and £24.38 towards the interest he might have earned on his state pension had he received it on time.
What we investigated
Mr V complained that The Pension Service failed to make him regular pension payments from August 2005 to the end of July 2006; that from August 2005 onwards he received unsatisfactory replies to his correspondence; and that they had not replied to him at all after April 2006. He said he had been caused financial hardship, stress and inconvenience.
What our investigation found
The Pension Service made a mistake in September 2005 when they failed to input Mr V’s bank details correctly. While regrettable, that mistake on its own did not amount to maladministration. It was after Mr V contacted them in October 2005, having not received his pension, that The Pension Service failed to provide an adequate service. In particular, they took four months to recognise what had gone wrong, despite clear and repeated contact from Mr V; and they sent duplicate cheques for the outstanding payment and failed to let him know what was happening or to respond to his emails. (We considered the possibility that Mr V’s emails after April 2006 were not received, but found it more likely that they were, given that he used an address that had worked previously.) The Pension Service also failed to identify Mr V’s correspondence as a complaint and to respond appropriately.
Those failures amounted to maladministration and Mr V suffered injustice as a result. He was put to inordinate trouble (including the trouble of making a complaint to the Ombudsman), and was caused considerable frustration and financial hardship (being denied timely payments of pension and incurring additional bank charges).
Two of the Principles of Good Administration (‘Being customer focused’ and ‘Putting things right’) were particularly relevant to Mr V’s case. This case demonstrates what can happen when mistakes are not spotted and put right quickly: what should have been a simple matter of rectifying an unfortunate error led to months of difficulty for Mr V and unnecessary work and rework for The Pension Service; while the way in which Mr V was dealt with after October 2005 fell far short of reasonable expectations of customer focus. We acknowledged that The Pension Service had a lot of work outstanding during the period covered by this complaint. Nevertheless, this complaint shows that getting hold of a problem at the first opportunity and dealing with it in a customer focused way would provide better customer service, and be a more effective and efficient use of The Pension Service’s resources.
The investigation concluded in June 2007 and we upheld Mr V’s complaint.
Outcome
In their initial response to the Ombudsman’s investigation The Pension Service said they:
- now treat all emails as a priority and responses from their International Pensions Centre are sent within ten days;
- believed there to have been no more problems with Mr V’s pension since they started to send payable orders to HSBC Hong Kong which are then transferred to Macau;
- had alerted staff to the error that occurred in Mr V’s case, changed their processes to reflect that and would give staff updated information showing which countries can accept payment by electronic transfer; and
- had given Mr V a named contact should any further problems arise.
As a result of the recommendations in our final report The Pension Service also:
- paid Mr V a further £100 by way of apology for the anxiety they had caused; and
- paid him £17.25 to reimburse the bank charges he had incurred as a result of their errors.
