Is the Post Office making money from disputed transactions?

By Tony Collins

This month the Shields Gazette reported that Kevin Carter and his wife Julie, who is registered disabled, had little choice but to re-mortgage their home after the Post Office’s Horizon system showed a deficit of tens of thousands of pounds.

The Carters and dozens of other former sub-postmasters say that Horizon showed shortfalls that didn’t exist by logging some transactions twice.

Sub-postmasters are not directly employed by the Post Office, and under their contracts, are responsible for deficits at their branches.

More than 150 sub-postmasters say they were prosecuted, or made to repay money, because of the system. Some of them were ruined, made bankrupt, or sent to prison.

Five years on, the Carters say they are still no further forward in their fight to reclaim their cash, and have been left with no option but to wait and see what happens.

Mr Carter told the Shields Gazette earlier this month: “We are still in limbo. The Post Office is adamant there was nothing wrong with the system but how can 150 people be wrong?

“We are hoping to have this sorted soon, and hopefully we can get our money back. But, right now, all we can do is sit and wait.”

The couple were allowed to sell their Post Office in Dickens Avenue, Biddick Hall, South Shields, only after they agreed to pay the Post Office £45,000 from the sale, which the PO claimed the couple owed. They have made further payments to the PO from their own pockets, and deductions from Mrs Carter’s salary.

Mr Carter said: “This is a nightmare for us. We were made to feel like criminals, when we haven’t done anything wrong. We contacted the Post Office and asked for help as we were sure it was down to the computer system. But the losses continued to get bigger and bigger and, in the end, they suspended us pending further inquiries.”

The couple are receiving support from Justice for Sub-postmasters Alliance which is representing sub-postmasters across the country.

PO statement

A spokeswoman for the Post Office said: “We cannot comment on individual cases and while mediation is taking place. We will also not comment on the contents of any confidential documents.”

“After two years of investigation, it remains the case that there is absolutely no evidence of any systemic issues with the computer system which is used by over 78,000 people across our 11,500 branches, and which successfully processes over six million transactions every day.”

Campaign

After a campaign for justice by MPs, led by Hampshire Conservative MP James Arbuthnot, forensic accountants Second Sight have investigated the Horizon system. The company’s interim report said its investigation was hampered by a lack of information from the Post Office. The full version of the report has not been published but Private Eye appears to have a copy.

It quotes Second Sight as saying that PO investigators often “fail to identify the underlying root cause of shortfalls prior to initiating civil recovery action or criminal proceedings”.

PO officials then “seem to have defaulted to seeking evidence that would support a charge of false accounting, rather than carrying out an investigation into the root cause of any suspected problems… investigators seem to have found that recording admissions of false accounting was the key to achieving relatively rapid, and inexpensive, asset recovery.”

The 23-page document also notes poor training of sub-postmasters using Horizon, inadequate record-keeping and shoddy auditing processes.

Suicide?

Surrey postmistress Seema Misra went to prison while pregnant on the strength of disputed Horizon evidence. Lee Castleton from East Yorkshire was told to repay £25,000 even though the Post Office wouldn’t tell him how it had disappeared. Tom Brown from County Durham was pursued for four years, accused of stealing £85,000. After sacking and bankrupting Brown, the Post Office couldn’t provide any evidence against him in court.

Private Eye says there are “dozens more heartbreaking stories behind this scandal, with at least one suicide”.

Comment

The PO has received, cumulatively, large sums from the Carters and other former sub-postmasters.

What has happened to the money while it has been in dispute – and who is earning interest on it? Is the Post Office earning money – and has it been earning money for years – on payments made as a result of the disputed transactions?

The longer the disputes continue the greater the suspicion that the Post Office is letting matters drift because it cannot see a way of resolving them. Meanwhile the interest on the disputed payments mounts. And ruined lives continue in ruins.

Private Eye suggests there might have been “miscarriages on a grand scale”. If so,  what’s the PO doing about it?  Some of the disputes are in mediation. But is this a way to park the most difficult cases indefinitely?

Private Eye says the PO pressured a working group, which was set up to coordinate the mediation process, to ignore Second Sight’s report and not pass it on to the mediation team, but it was overruled on the casting vote of working group chairman Lord Cooper.

Does the PO really want injustices to be righted? Or will it let the most contentious of the disputes drag on?

Computer blunder has left us in limbo

Jailed and bankrupt because of “unfit” Post Office IT?

Are some sub-postmasters being gagged?

Private Eye – more trouble looms over the Horizon

Justice for Subpostmasters Alliance

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