A recent report issued by Age UK states that, as a result of their research, at least 130,000 elderly people have been the victims of financial abuse by a family member or someone else they know. It is also estimated by Age UK that around 400,000 in England aged 65 or over have difficulty in managing their money, and therefore the prospect for financial abuse is significant.
In recent years we have experienced an increase in the volume of instructions concerning financial abuse of the elderly and also younger people who have difficulties in managing their affairs. In our experience, financial abuse tends to occur when relatives have either been asked by the individual to assist with looking after the financial affairs, or have taken that role upon themselves, and then have proceeded to act in breach of their duties to act in the best interests of the individual. This occurs not only when the arrangements between the individual and the person assisting is informal, but can also occur when there is a formal relationship, such as when the person assisting does so under a Power of Attorney. This often comes to light when children of the individual clash over the management of their parents’ financial affairs.
It is usual that one child or family member ends up carrying the burden of looking after their relatives’ financial affairs, and with that comes great responsibility. That person usually has control of the bank cards and cheque books and over the years we have dealt with many cases where the relative has abused that position of trust by, for example, using their elderly relative’s money to purchase items for themselves, or to make significant gifts to themselves or other family members. Another type of financial abuse might be that the person who is assisting is too reticent or hesitant in spending the individual’s money on things that they really need. Such reluctance can often come into the equation when the individual needs to pay for private care and we have seen cases where the person looking after the individual’s finances would rather skimp on the cost of care in order to preserve what they see as their future inheritance.
The report from Age UK is certainly in line with our own experience and our own research which was published in The Telegraph in October 2015.
What are the signs of financial abuse?
- Sudden or unexplained changes to the individual’s bank accounts or the way that they bank
- Deterioration of the individual’s living conditions may be an indication that their money is being spent elsewhere
- A sudden inability to pay a bill and frequent cash withdrawals
- Unexplained transactions
- Disappearance of documents relating to the individual’s finances and affairs from their home
- An increased level of anxiety and distress in the individual – they may have some awareness as to being the victim of financial abuse, but powerless to stop it.
What can be done about financial abuse?
If the person who is suspected of carrying out financial abuse has done so as in their role as a registered Attorney under a Power of Attorney, firstly it is worth establishing whether or not the individual still has mental capacity. If they do, then it may be possible for the individual to revoke the appointment of the suspected person as their Attorney. If they no longer have capacity to do this, then a report can be made to the Office of the Public Guardian (OPG) which has responsibility for investigating concerns about the actions of registered Attorneys and Deputies. The OPG has the power to carry out investigations and make applications to the court for the suspension, discharge or replacement of a Deputy or for the revocation of a Power of Attorney and to inform the police if a crime has been committed.
If suspected financial abuse has been carried out by someone who is appointed as Attorney under Enduring Power of Attorney (EPA), but has not registered the EPA with the OPG, the OPG has no jurisdiction. However, an application can be made to the Court of Protection for somebody else to be appointed as a Financial Deputy for the individual in order to take over the management of their finances and affairs and thus protect them from the suspected financial abuser.
In the case of registered Powers of Attorney where a report to the OPG is either inappropriate or has not produced the desired results, a third party can make an application to the Court of Protection for revocation of the appointment of that Attorney.
The Court of Protection has the power to appoint a Deputy to look after the individual’s finances and affairs and, where there is no suitable person willing to take on the role, a Deputy can be appointed from a pre-approved panel of independent Deputies.
What can be done to remedy the wrongs already committed?
- The acts committed by the suspected financial abuser may amount to a criminal offence of theft and/or fraud. If a report is made to the police, this may result in a criminal prosecution under which the criminal courts have the power to order the recovery of money as the proceeds of crime.
- Alternatively, it may be possible to bring a civil claim against the suspected wrong doer to return monies taken to the individual, or to reverse transactions that have been procured as a result of fraud and/or undue influence.
- If it is suspected that the wrong doer is in the process of, or will shortly dissipate the monies they have taken, it may be possible to apply for an urgent freezing injunction which would have the effect of freezing the suspect’s financial accounts and thereby preserving the money pending the outcome of the claim against them.
For further information and to find out how we can help you, please contact either Daniel Winter, Partner in our Contested Probate Team, or Peter King, Partner in our Wills and Probate Team on 01279 755777.