The Riverside Group Limited (202323471)

REPORT

COMPLAINT 202323471

The Riverside Group Limited

17 March 2025

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 an overpayment of service charges made by the resident.

Background

The resident is an assured tenant of the landlord who is a housing association. The property is a 2 bedroom flat. It is in a building which is part of an extra care scheme managed by the landlord. The resident first moved to the building in November 2020. She then moved internally to another flat within the building. Her new tenancy began on 24 March 2022.
The landlord’s records show that the resident has mobility issues and receives a range of support from it. Further, she receives external support to help with her mental health. The resident has told us that she is autistic.
The resident contacted the landlord on 9 March 2023 as she was waiting for a refund of her service charge. The income officer said they needed to meet with her to discuss this further. The landlord has noted that at the time the resident was unable to attend a meeting. It was agreed that the resident would let it know when she was available. The resident met with the housing officer on 2 August 2023 and the income officer on 15 August 2023. The resident was supported by the officer in raising a formal complaint.
Her complaint was received on 21 August 2023. In this she said:
1. She had been making double payments for her service charges. This had been ongoing for 10 months before she became aware of this.
2. The error had occurred when she moved flats. 2 direct debits had been created in error, leaving her former account in credit. She wanted this money to be refunded to her.
3. The landlord had told her that this could not be refunded to her. It had told her that there was a debt on her current rent and service charge account. It had not previously let her know about this.
4. This debt was due to the local authority refusing to pay housing benefit to cover an overlap in her 2 tenancies. The income officer had assured her that housing benefit would cover this period. She had given the income officer a copy of a letter she had received which said she was not eligible. The officer had told her “not to worry and that it would be sorted”.
5. As this had occurred over 12 months ago, she was unable to appeal the decision.
6. This had caused her a great deal of worry. It had affected her mental and physical health. She had not previously been in debt. She was concerned that this could affect her future plans to move.
7. She had trusted the landlord’s staff. She felt that the issues were due to their error. While she did not feel she should have to submit a complaint, she wanted the matter to be resolved.
8. She believed that the landlord should consider an individual’s circumstances in its decision making.
The landlord provided its stage 1 complaint response on 11 September 2023. In this it said:
1. It had reviewed her accounts. It confirmed that there was a credit of £273.60 on her former account. This would be moved to her current account. This was to help with the arrears.
2. It apologised about the time taken and that this meant she was unable to challenge the local authority’s decision not to pay her housing benefit.
3. It noted that she had been consistent in her payments and understood her frustration. It said it was sorry.
4. As a resolution to her complaint, it was “issuing her with an apology for the time taken to resolve this matter”. It further apologised for the negative impact on her.
5. It made an offer of £50 in vouchers as a goodwill gesture. It said that this was a goodwill payment and not compensation.
The resident contacted the landlord on 12 September 2023. She was unhappy with the landlord’s response and its goodwill offer of £50 in vouchers.
The landlord provided its stage 2 complaint response on 21 September 2023. It noted that it had spoken with the resident on 19 September 2023. She had told it why she disagreed with its response to her complaint. It said that:
1. It understood that the resident had not disputed the arrears but that she believed that these were due to a failure by the landlord. She believed that it should have done more to help her in getting a dual payment from housing benefit. Further, that when the local authority did not pay her housing benefit, the landlord should have told her earlier.
2. While it could support a resident with a claim, responsibility could not “be abdicated” to it. The local authority had sent its decision letters to the resident and not its support staff. It was not therefore able to write off the debt.
3. The landlord acknowledged that there had been a double payment. This was due to an error in creating a double direct debit.
4. “It would be a breach of standard procedure to return an overpayment for accounts that are in arrears”. It considered that it was “lawful and procedurally correct” to use a credit balance to offset part or all of arrears on a current tenancy account.
5. It understood that this has been stressful for the resident. It acknowledged that it had only told the resident of the arrears after several months.
6. It reiterated the apology it had made at stage 1. It also agreed with the decision to offer £50 as a goodwill gesture. It believed that this was a fair and considerate gesture in the circumstances.
7. As an outcome to her complaint its housing officer would provide quarterly rent statements. They would also be available to discuss her account.

After the formal complaint process

The resident remained unhappy with the outcome of her complaint. The landlord’s income officer continued to support her. She raised her complaint with the Service on 12 November 2023 by completing an online form. She explained the detail of her complaint. As an outcome she wanted the landlord to apologise to her, acknowledging the situation and its insensitivity. She said that she felt that it had not listened to her or considered her concerns.
In follow up on 15 November 2023, she explained the negative impact on her health. She believed that the landlord had written off debts for other residents without the need to complain. The entire process had taken a year to resolve. The local authority had now paid her housing benefit, and her landlord had refunded the credit.
The landlord confirmed that it refunded the overpaid service charge of £273.60 directly to the resident on 3 November 2023.

Assessment and findings

Scope of Investigation

The resident has told the Service that the situation around her rent account, both the arrears and the duplicate direct debit, caused her significant distress. This had a negative impact on her health and personal life. The Service is unable to draw conclusions on the causation of, or liability for, impacts on health and wellbeing. Matters of personal injury or damage to health, their investigation and compensation, are not part of the complaints process. These are more appropriately addressed by way of the courts or the landlord’s liability insurer as a personal injury claim. We have, however, considered whether the resident has been caused distress and inconvenience because of any failings on behalf of the landlord.

The landlord’s handling of an overpayment of service charges made by the resident

The resident’s complaint focused on the landlord’s refusal to refund a credit on her former account. The landlord has confirmed that the credit was due to an error made when the resident moved to her new home. It has said that the resident’s direct debit should have been transferred to her new address. Instead, a second direct debit was set up. This meant that the resident continued to make payments into her former account, while also making payments for her new tenancy. This error was not picked up for almost a year.
The resident contacted the landlord on 9 March 2023 to ask for her refund. In the records provided by the landlord it was noted that its officer needed to meet with the resident to discuss the refund. It has not said why this was the case. Due to the resident’s unavailability this meeting did not happen until August 2023, a delay of 5 months. It appears in this time that there was a change in the officer handling the resident’s account.
It is unclear if the landlord had informed the resident that she was in arrears before she asked for the refund to be made. It was this and its refusal to refund the credit that led to the resident raising her complaint. The landlord’s decision to transfer the credit to her current account was confirmed in its complaint response. There was a failure to recognise that this was not the outcome that the resident wanted.
The landlord failed in its response at stage 1 to acknowledge that the double payment of service charges was due to its error, as it incorrectly set up a second direct debit. This error was acknowledged at stage 2. It should not however have been necessary for the resident to escalate her complaint for the landlord to acknowledge its error. Furthermore, the landlord did not apologise for this error or the inconvenience this caused her. This was a failure by the landlord.
The landlord only appears to have informed the resident that she was in arrears in August 2023. This is 17 months after the start of her tenancy. This is a significant failure in its oversight of the resident’s account. It is also contrary to the landlord’s income management policy. Its policy says that it will “make personal contact with tenants in arrears at an early stage to prevent the debt from rising”. In line with this policy, it should have provided her with “regular, accurate and clear information on outstanding debt”. That it did not do so left the resident without true clarity as to the position with her account. This was a failure by the landlord.
The resident was aware that the local authority had refused to cover the transition between her tenancies. This information was included in her complaint. She said that she had been told “not to worry” by the landlord and that this would “be sorted”. In its stage 2 response the landlord has said that the responsibility sits with the resident. This did not acknowledge the support that had been given to the resident and the reassurances she had received from its officers. Further she had not been notified of the arrears, so had no reason to believe that the landlord had not resolved the issue on her behalf. While no evidence that the resident was told by the landlord not to worry, she had placed a level of trust in her landlord. It should have acknowledged this in its complaint response.
The resident was refunded the credit on 3 November 2023. The landlord has also confirmed that the arrears on her account have been cleared. The local authority made a payment of housing benefit, coving the transition between her 2 tenancies. The landlord has said that the local authority has confirmed an error in not making the payment initially.
The landlord’s complaint responses do not fully acknowledge the impact the situation had on the resident. Further, it did not acknowledge its own errors and the length of time over which the situation remained unresolved. The Ombudsman finds that there was a service failure in the landlord’s handling of this issue. It is therefore ordered that the landlord issue the resident with a further apology.
The landlord offered the resident £50. This was for the negative impact on her of the time taken to resolve the issue. It offered this in the form of vouchers as a “gesture of goodwill”. This definition is in line with the landlord’s own compensation procedure. It says that a gesture of goodwill is “an apology for when we acknowledge that the level of service was below the standards our customers expect”. While the landlord has made an offer in line with its own procedure, it is felt that it did not go far enough. It did not acknowledge the distress and inconvenience caused to the resident by the delay in dealing with the refund and resolving the issue of arrears on her account. This caused her unnecessary stress.
Having considered the landlord’s compensation guidance and the Ombudsman’s guidance on remedies an order has been made for an additional sum of compensation to be paid by the landlord in recognition of the distress caused.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in the landlord’s handling of an overpayment of service charges made by the resident.

Orders

Within 4 weeks of the date of this report, the landlord must:
1. Apologise to the resident, in line with the Service’s guidance that:
  1. an apology should be made by the landlord as a body, rather than an identified member of staff.
  2. an apology should acknowledge the service failure; accept responsibility for it; explain clearly why it happened; and express sincere regret.
  3. where appropriate, an apology should include assurances that the same service failure should not occur again and set out what steps have been taken to try to ensure this.
2. Pay the resident compensation of £100 for the distress and inconvenience caused to her by the service failure identified in this report.
3. This is in addition to the landlord’s offer of £50. If this has not already been paid this, it should be paid to the resident in cash rather than the vouchers offered.