Lee Castleton cannot get a
mortgage or a bank account, and is unlikely to ever own his house.
He works over 100 hours a week as an electrician to make ends meet
and support his wife Lisa and two children, Millie, 13, and
Cameron, 12.
The 40-year-old
former postmaster was declared bankrupt after he refused to pay the
Post Office £27,000 – money he owed because the accounts of his
Post Office branch in Bridlington, Yorkshire, showed deficits over
a 12-week period in 2004.
Castleton insists
he did not owe the money – although it showed as a loss on the Post
Office’s Horizon system, which is used by postmasters to do their
accounting. He is one of several postmasters to come across losses
they could not explain.
Castleton was so concerned about the debt that he refused to pay
it back, and decided to go to court to contest the Post Office’s
insistence that he should pay.
But the court ruled that the debt was real, not illusory as
Castleton argued. “The losses must have been caused by his own
error or that of his assistants,” the judge said. “It is
inescapable that the Horizon system was working properly in all
material respects.”
Having lost the case, Castleton was left with costs of £321,000.
In 2007, he filed for bankruptcy. “I was in too deep – I see that
now. The whole thing has been heartbreaking,” he says.
After an investigation of six months, Computer Weekly has
discovered that at least seven postmasters have come into conflict
with the Post Office after the system showed losses which took them
by surprise.
Jo Hamilton started signing her accounts even when she knew they
were wrong, because, she says, calls to the Horizon helpline didn’t
stop the deficits occurring and she felt backed into a corner. She
was convicted of false accounting, but was spared a prison sentence
after local villagers organised a collection to pay the debt.
Noel Thomas was convicted of the same charge, and spent his 60th
birthday in jail.
A fourth postmaster, Amar Bajaj, ended up selling his Post
Office. He resents making good the shortage and claims that the
Post Office has received £11,000 from him which he does not
owe.
A fifth, Alan Brown, had a £6,500 deficit written off by the
Post Office – only to find another £13,000 loss that he could not
explain.
In a sixth case, Judy Ford had her IT equipment replaced by the
Post Office, but not before £10,000 had gone missing. The company
said it was probably down to her own errors, but she insisted she
had not got anything wrong. She couldn’t afford the repayments. “I
lost all confidence in my job, and now I am going bankrupt. I have
no trust in the Post Office at all,” she says.
A seventh postmaster, Alan Bates, refused to sign his weekly
accounts, saying it would have made him liable for any losses. He
has called for a public inquiry.
All of the postmasters we spoke to say that their union, the
National Federation of Sub Postmasters, has refused to help them
investigate their concerns.
The Post Office denies it received any complaints from
postmasters, and also denies that any IT-related fault could have
caused the systems to show incorrect sums of money owed by some
postmasters.
A spokesman said, “Horizon is an extremely robust system which
operates over our entire Post Office network and successfully
records millions of transactions each day. There is no evidence
that points to any fault with the technology. We would always look
into and investigate any issues raised by sub-postmasters.”
The Federation declined to comment on the postmasters’
claims.
Lack of evidence
None of the postmasters have firm evidence that IT was to blame.
Jo Hamilton did not even realise it could have been the equipment
causing problems until after her court case. She says, “I didn’t
understand what was happening, and I’m so rubbish with IT that at
the time I thought it was somehow my fault. But other postmasters
contacted me after my case, and I realised I wasn’t alone.”
One expert, Tony Sykes, a business systems specialist, says that
further investigation is needed. Sykes has studied the system
print-outs which showed that Castleton’s Post Office had run up
large debts.
A senior official at the Federation of Sub Postmasters, who
asked not to be named, said, “The Horizon system may have been
hunky dory on day one, but how does the Post Office know the system
hasn’t degraded over the years?
“The problem we have is the culture of the Post Office. It’s
heresy to say something can go wrong. No one can say computers
cannot go wrong.”
Those affected say the Post Office did not fully investigate
their claims. They also say that their contract requires them to
pay any loss at their branch, whatever the circumstances.
Litigation solicitor Leigh Ellis, an IT specialist, says the
contract between postmasters and the Post Office is weighted in
favour of the company. “Postmasters need to be very careful that
they retain evidence of differences between what the computer
system reports and what they receive through the till. They need to
put their concerns in writing to the Post Office explaining what
the problems are.”
Chris Wise, a business systems consultant who acts as an expert
witness in court cases involving IT systems, says, “It’s difficult
to know what has gone wrong from the evidence we have to date, but
almost all IT systems ever built have malfunctioned at some point.
What matters is the way a business deals with those errors and gets
to the bottom of what has actually happened.”
He says it may not have been IT glitches that caused problems
for postmasters but the way the Post Office handled them.
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Case study 1
- Lee Castleton, Bridlington, Yorkshire
Lee Castleton, 40, was postmaster at the
Bridlington post office in east Yorkshire. His problems
started in January 2004, and he claimed he couldn’t get help
from the Post Office.
“Misbalances continued for 12 weeks. I spent hours going through
accounts, trying to find out what had happened. It was baffling,”
he says.
Castleton rang the Horizon helpdesk, which is run by the Post
Office, and asked repeatedly for help and a system check, but says
they did very little.
“The Federation didn’t help me either. It said it didn’t want to
get involved and refused to let me join.”
After 12 weeks, Castleton was suspended and the Post Office told
him he had to pay for the losses. “I decided to contest my
obligation to pay the money in the civil court, because I hadn’t
done anything wrong,” he says.
Castleton could not afford lawyers in the High Court, or pay an
IT expert witness to look at the system logs for him. He argued
that the discrepancy in his accounts had been created by the
computer. But the judge said that the deficiencies were real, not
illusory, and, as such, were evidence that the branch had not been
managed properly. “The losses must have been caused by his own
error or that of his assistants,” the judgment said.
Under their contract with the Post Office, postmasters are
liable for any losses that are due to carelessness, negligence or
error. Castleton was also liable for the company’s legal costs.
“The Post Office really put me through the mangle,” he says. “I
owed £27,000 for the deficits, and £321,000 altogether. I was in
too deep – I see that now. The whole thing has been
heartbreaking.”
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Case study 2
- Jo Hamilton, South Warnborough, Hampshire
Jo Hamilton, 51, was postmistress in South Warnborough in
Hampshire between 2003 and 2005.
Hamilton started experiencing problems in October 2003. She
entered every transaction into the system via the touchscreen till,
and at the end of the week the computer would tell her how much
money she should have.
“One time it said I was down £2,000, so I rang the Horizon
helpdesk. The supervisor told me to do various things, and three
minutes later I was £4,000 down. Whatever I did after that, I
couldn’t get it to come up any different,” she says.
The Post Office told her she owed the money, and took repayments
out of her monthly wages. “It made me reluctant to phone them,
because it was just crazy – when I asked for help, it just doubled
the amount and said I owed it money.”
Hamilton’s problems worsened. “Every week the system would come
up telling me how much I should have in there. I knew it wasn’t the
right amount, but I didn’t know what to do. I couldn’t ring them
up, because I just didn’t have the money to pay it all back. So I
signed the accounts each week, saying there was a certain amount in
there when I knew there wasn’t. I know it was dishonest, but I
didn’t steal any money. It got worse and worse.”
Post Office auditors visited the branch in March 2005 and told
Hamilton she owed £36,000. They prosecuted her for theft and 14
counts of false accounting, but later dropped the theft charge.
Hamilton says the case did not deal with the issue of IT. She
pleaded guilty and was given a year’s probation. Her house was
remortgaged to pay the money, and the villagers in South
Warnborough collected £9,000 between them to help.
Hamilton says, “In 18 months, I will have finished paying back
the villagers, but won’t have paid off our mortgage.”
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Case study 3
- Noel Thomas, Gaerwen, Anglesey
Noel Thomas, 61, from Anglesey, worked for the Post Office for
42 years. His problems started in 2003, when he discovered a
deficit of £6,000. He says he spent hours looking at it, trying to
find out what was wrong.
He says the Post Office paid half of the deficit for him, and he
paid the other half. He didn’t have any more problems until
2004.
“It started up again all of a sudden. The money was going at a
rate of £2,000 a month, and it went on until October 2005. The last
figure they told me I owed was £50,000.
“The National Federation of Sub Postmasters didn’t want to know.
It is frustrating – I would like to know where that money went to.
The whole thing is a real mess,” he says.
Faced with mounting deficits and nowhere to turn for help,
Thomas signed the accounts to say the money was there, when it
wasn’t. “I didn’t know what else to do. It was my biggest mistake –
I should have turned round and told them I was shutting up shop
until they found out what was going on. But at the time I thought
they would close the Post Office if I did that, and that would
cause a problem for the village.”
The Post Office prosecuted Thomas for false accounting. He
pleaded guilty and says the IT system didn’t come up during his
hearing – his barrister told the judge about his good
character.
Mark Jenner, who at the time was the director of fraud
investigation at accountancy firm Baker Tilly, said in a report
prepared in advance of the case that he did not propose that the
Horizon system was flawed. “If the Horizon system was flawed, I
would expect to see issues raised by all 14,000 branches in the UK
and not only a handful,” he said.
But Jenner had been unable to examine the computer terminal used
in Thomas’s branch. “To completely discount the possibility that
the Gaerwen branch terminal was not responsible for creating
systematic and cumulative errors, I would still wish to inspect the
terminal,” he said.
Jenner’s report was produced before the court hearing, when
Thomas expected to face charges of theft. It was not used in the
hearing because the theft charges were dropped.
Thomas was sentenced to 12 weeks in prison. “I spent my 60th
birthday in there,” he says. “It was hell on earth and it took me a
long time to get over it.”
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Case study 4
- Amar Bajaj, Chelmsford, Essex
Former barrister Amar Bajaj, from Chelmsford, sold his post
office after losing £11,203.
His problems started in 2004, and he wrote to the Post Office
every time there was a misbalance in the accounts. In July 2005, he
contacted a solicitor because he felt that “the Post Office would
look to prosecute us due to its own mistakes”.
Bajaj says of the problems, “Any shortage will remain on the
system for many weeks until a demand is made by the Post Office for
the amount to be made good.
“I personally made good any shortage. After we got it back down
to zero, the system would show a shortage of anywhere between
£2,500 and £3,500 within a week.
“In spite of various letters and correspondence between myself
and solicitors, no official has visited to see or check or remedy
the defects. I am of the opinion that the Post Office is in breach
of its contract to maintain the system, and therefore has
wrongfully obtained our money and is earning interest as a
result.”
Bajaj contacted his MP, Simon Burns, who wrote to the Post
Office on his constituent’s behalf. In its reply, the company said,
“We do accept that individual branches may experience very
occasional failures.”
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Case study 5
- Alan Bates, Llandudno, Wales
Alan Bates, 52, worked at the post office in
Llandudno in north Wales, from 1998 to 2003.
In 2000, he discovered a shortfall of £1,041.86 which he
couldn’t account for, and wrote to the Post Office. After two
further letters, the company wrote back in 2002, saying they would
write off the amount but without giving any reason.
It said, “Post Office Ltd has decided to take no further action
in respect of the loss at your post office which will be written
off.”
Despite the loss being written off, Bates continued to have
problems with deficits. He refused to sign his weekly accounts,
saying it would have made him liable for any losses. When deficits
occurred, he refused to use his own money to pay them. He was a
member of the union, but said it was not supportive.
“Why didn’t the Post Office prosecute me? Because it knew there
were faults with my system. It did not want to take me to court. I
never tried to take it to court as I had received quite a broad
range of legal advice about doing so. I was told that it could keep
me in court and keep appealing any findings until I ran out of
money.
“There should be a public inquiry into this. I am in no doubt
that many sub-postmasters have finished up breaking the law because
of the Post Office and the position it left them in,” he says.
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Case study 6
- Alan Brown, Callender Square, Falkirk
Alan Brown is a serving postmaster. He gave an e‑mail dated
January 2006 to Lee Castleton for Castleton to use in his own court
case. The e‑mail says the Post Office had written off a £6,500 loss
on his account “some time” after he said it had appeared on the
system.
But he says another shortage appeared that evening when he was
balancing the accounts. “I have one screen that says I have a £4
gain, and the screen next to it says I have a £13,000 loss on the
same stock unit,” he says in the e‑mail.
“One node has stopped communicating with the rest. This could be
costing sub-postmasters throughout the country a fortune and all
because the computer systems occasionally do not work.”
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Case study 7
- Julie Ford, Yeovil, Somerset
Julie Ford is from Yeovil in Somerset. She became postmistress
of Westfield Post Office in October 2007. Her problems with the
company started at the beginning of November 2007, when her branch
started losing hundreds of pounds at a time. The problems continued
until February 2009, when she was forced to file for
bankruptcy.
“At one stage I was £1,300 down. I rang up the Post Office and
said I think there’s something wrong. It said one of the staff, or
myself, had sticky fingers,” she says.
By January, Ford had paid all her £2,500 savings to the Post
Office, so rang up and asked for an audit when £3,000 went missing
overnight. The audit found she was nearly £10,000 short. The Post
Office took money out of her wages, and suspended her for 18 weeks
while it carried out an investigation.
Instead of prosecuting or terminating her contract over the
deficits, the company reinstated Ford in June 2008 without further
action. The problems continued until several parts of her Horizon
system were replaced, then balancing returned to normal.
But Lynn Hobbs, general manager, network support at the Post
Office, said in an e‑mail at the time, “I am sure you are aware
that we have had previous challenges in relation to the integrity
of the system and I can confirm that the system has passed all
tests and been exonerated in both the civil and criminal courts. I
therefore cannot accept that the losses were as a result of the
Horizon kit.”
Hobbs suggested, “I think we should also look at other factors
which coincided with this change, such as the additional training
provided and the change of personnel at the branch.”
Ford says, “In the end I refused to work. I wasn’t taking the
money and I wasn’t making stupid mistakes. If they thought I was
stealing money, why did they reinstate me? I lost all confidence in
my job, and now I am going bankrupt.”
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Other investigative articles by Computer
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