Financial abuse: protection and prevention

Abuse of older people comes in many forms including financial, psychological and physical. It is often the case that an elderly victim will suffer from more than one type of abuse at the same time.

A frequent occurrence is where the older person is subjected to a degree of pressure amounting to bullying. They may well be suffering from a reduction in cognitive powers including memory loss which makes them particularly vulnerable.

In considering financial abuse we see that this abuse causes long term damage not only to a person's finances but also related stress and anxiety problems stemming from it.  The Care Act 2014 defines financial abuse as having money or other property stolen, being defrauded, being put under pressure in relation to money or other property, or having money or other property misused.

Who is at risk?

In November 2015, Age UK published their “Financial Abuse Evidence Review”. This identified various factors that make some elderly persons more vulnerable to financial abuse than others. This showed that those suffering from age related conditions like dementia, reduced cognitive function, and those with increasing poor health or at risk of clinical depression, are more vulnerable than others. Another study showed that women were twice as likely as men to suffer financial abuse: the majority would be living alone, aged between 80 and 89, and single or widowed.

What are the warning signs?

How can we identify when financial abuse is taking place? Possible indicators would include the following which professionals and other concerned individuals should be on the lookout for:

  • an inability to pay bills/unexplained shortage of money;  
  • unexplained withdrawals from an account;  
  • a new person befriending the older person or someone known to them suddenly taking too much interest in their finances;
  • unexplained loss/misplacement of financial documents;
  •  the recent addition of authorised signers on a client or donor’s signature card; or
  • sudden or unexpected changes in a will or other financial document.

How can financial abuse be avoided?

There are various steps that can be taken to mitigate such abuse.

It is important to ensure that the older person has complete confidence in anyone they are entrusting with their finances whether that is family members or their appointed attorneys. They should be reminded not to be afraid to change their mind about decisions in the future: they should always challenge any suspicious behaviour. We always advise clients to prepare for older living and this includes ensuring that their legal documents are kept up to date and reviewed regularly. An attorney appointed ten years ago may no longer be suitable today. Circumstances and people change.

Simple steps should be taken like reviewing your will and lasting power of attorney (LPA). Keep your "letters of wishes" up to date so that your attorneys and or family know what your particular wishes are with regard to finances and health issues. Speak to your advisers about how to do this. LPAs are powerful documents: spend time reviewing and ensuring whoever is appointed is trustworthy and has sufficient additional powers to manage your finances properly. We build in safeguards for our clients' LPAs so that the document protects so far as possible against the risk of the attorney abusing their position.

For property owners we also recommend that you register alerts at the Land Registry. This will give you advance warning of any unauthorised dealings with your property. We consider this a priority step to protect clients from fraudsters.

Who can help?

It is important to ensure that if abuse is suspected that you or a trusted friend, relative or professional adviser know to call for help. The Office of the Public Guardian has an investigation unit where concerns about an attorney can be raised. If there is evidence that a crime has been committed then you should call the Police.

We have extensive experience of financial abuse cases and can assist you if you have concerns or you know suspicious activity is going on. We have teams across our firm who will collaborate to bring a perpetrator to account. For example, one recent case involved our private client, family, residential property, insolvency and corporate teams all working together to ensure that our client (the victim) recovered property and misappropriated funds, and participated in bankruptcy proceedings against a fraudster.

What is important to remember is that by spending time choosing the right attorneys, regularly re-evaluating their appointment, and keeping the LPA document under review (particularly if circumstances change), you can ensure you are as well protected as possible. 

Ann Stanyer
Partner, Wedlake Bell LLP

Illustration by Adi Kuznicki

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Spring Issue Thirty Eight