8 June 2018 by

How to spot and tackle financial abuse of the elderly?

It is a concerning reality that financial abuse of the elderly is happening on a large scale.

It is often someone close to the elderly person who carries out the abuse and quite often the  abuser is actually appointed by the elderly person as their attorney under a Lasting Power of Attorney (“LPA”).

The Care Quality Commission (‘CQC’), set up as an independent regulator of all health and social care services, recently responded to a freedom of information request (‘FOI’). The results are quite disturbing, revealing that between January 2013 and June 2017 the CQC was notified of, and investigated allegations of financial abuse in care homes on 12,968 occasions. The data also showed that those aged 65 and above were the main target of financial abuse.

Clearly not enough is being done to prevent financial abuse. In care homes better training of staff to spot the signs of abuse early on as well as more effective reporting to ensure that clear data is maintained would be a step in the right direction but financial abuse of the elderly will also extend to those living in their own homes or with friends or relatives.

What is financial abuse?

It can take many forms but in simple terms is;

  1. The misuse of a person’s funds or assets and
  2. Not acting in a person’s best interests when managing their affairs.

Tips to spot financial abuse and identify an abuser

 If you know an elderly person, the following might help you to spot possible financial abuse.

  1. Excessive or unusual gifts being made
  2. Mixing of money and accounts between the elderly person and their attorney/carer.
  3. Unpaid bills (particularly care home fees).
  4. Opening a credit card account or making unusual loan applications.
  5. High risk investments being made that appear out of character
  6. Not keeping appropriate financial records.

 What steps could be taken to avoid financial abuse?

The reality is that financial abuse can occur whether or not there is a Lasting Power of Attorney (‘LPA’) or, in the absence of an attorney, where there is a court appointed “deputy” in place.  A deputy is an individual (usually a close relative or friend but sometimes a professional such as a solicitor) who is appointed by the Court to make decisions about a person’s property and financial affairs and/or health and welfare. A deputy can only be appointed where a person loses capacity without having previously appointed an attorney under a LPA.

That being said the importance of LPA’s as a tool for ensuring that a person’s property and finances are dealt with in accordance with their wishes, if they lose capacity, outweighs the danger of them being used to facilitate abuse.  The solution would seem to be increased scrutiny.

The Office of the Public Guardian (‘OPG’) is currently reviewing the format of LPA’s. One solution might be to introduce supervision requirements similar to those imposed on Court appointed deputies. It is clear from Court of Protection cases that often financial abuse is detected through the annual accounting requirement for deputies. This could in practice be extended to active LPA’s. This mandatory accounting could be triggered by:

  • The Banks – e.g. when the attorneys become registered on the accounts this would trigger a notice to the OPG that the LPA is now active. Financial transactions would then be subject to the accounting regime.
  • Solicitors – e.g. in respect of sale/purchases/gifts of property to be effected by use of a power of attorney.
  • Investment managers – e.g. for sales/purchases/gifts of investments over a certain value by use of a power of attorney.

These steps are relatively simple and would not involve extensive monitoring of all powers of attorney, but only those being actively used by attorneys. Of course, it would not prevent low-level abuse where sums of money are being paid over on a regular basis, but it would be a start to tackling financial abuse.

You can also contact one of our solicitors in the team here.

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