‘Economic abuse can take many forms, from mismanaging finances to theft or fraud, but essentially it amounts to the illegal or improper exploitation of someone’s funds or resources,’ says Laura Redding, Head of Court of Protection with QualitySolicitors Parkinson Wright. ‘Elderly people are often particularly vulnerable to such abuse – whether from family, friends, carers or someone with a lasting power of attorney – due to health or dependency issues, social isolation or the inability to access financial advice or services.’
‘It is, of course, extremely upsetting if you suspect that a vulnerable loved one is the victim of such abuse and you may feel powerless to intervene,’ Laura continues. ‘If you are alert to the signs, however, there are a number of steps you can take to scupper the nefarious plans of an abuser.’
What are the signs of financial abuse?
Financial abuse indicators can include:
- Large sums of money being withdrawn from a bank account or new names being added to the bank account or benefits payments.
- A will being created or changed in favour of someone unexpected, or a power of attorney being aggressively pursued by someone.
- A previously uninvolved relative coming out of the woodwork and asserting their rights over financial affairs and possessions.
- Unexplained ‘gifts’ being handed out, or assets disappearing during visits.
- One person deliberately isolating another from family and friends to maintain greater control.
- Bills being left unpaid where someone else is in charge of paying them.
- An attorney who is evasive over financial details, fails to keep proper records, or tries to justify transferring money to themself.
Options if you suspect financial abuse
As a first step it is advisable to contact our solicitors who can advise you on your particular situation, the options open to you, and the sort of information that you would need to collect or provide to take things forward.
Call the police
Financial abuse of the elderly can amount to a crime, so if you suspect someone is a victim you should report your worries to the police. If convicted, an abuser could face a jail sentence of up to 10 years as well as a compensation order, requiring them to return the misappropriated assets.
Contact your local authority safeguarding unit
You should also report a suspected abuser to the local authority adult social services, as they have a statutory duty to investigate allegations of economic abuse and take any appropriate action.
Apply for an appointeeship
If the vulnerable person receives a state pension or benefits and does not have the capacity to manage them anymore, or there are concerns that they are being mismanaged, an application can be made to the Department for Work and Pensions to make you the appointee of the client's benefits. Anyone who is over the age of 18 and has permission from the vulnerable person’s next of kin can apply, but you can also ask a solicitor or a social worker to make the application for you.
Liaise with financial institutions
A number of banks and building societies are signatories to UK Finance’s Code of Practice on financial abuse which aims to support victims of financial abuse and help them recover control of their finances. Staff are trained to identify signs of abuse and can put measures in place to prevent further fraudulent transactions. They can also help get a copy of a credit report to see if an abuser has taken credit out in the account-holder’s name – if so, the bank can take action in regard to fraudulent debts.
Apply for a financial lasting power of attorney
If your loved one has mental capacity (see below) and they would like your help, you can apply for a financial power of attorney, giving you the legal right to oversee their financial affairs.
Apply for a deputyship order
A person lacks mental capacity if they are unable to make decisions about their personal finances. Under the Mental Capacity Act 2005, a person is deemed to be unable to make a decision if they cannot: comprehend the information relevant to the decision; retain that information and incorporate it into their decision-making; or communicate their decision.
The Act sets out a two-stage test of capacity:
- Does the person have an impairment of their mind or brain, whether as a result of an illness, or external factors such as alcohol or drug use?
- Does the impairment mean the person is unable to make a specific decision when they need to?
If you suspect someone has lost mental capacity, then they are particularly vulnerable to financial abuse and you should contact our solicitors as soon as possible. We can ask a professional such as a psychiatrist, psychologist or social worker to offer their opinion. If your suspicions are confirmed, we can help you to apply to the Court of Protection for a deputyship order which allows you to make decisions on their behalf. If you would rather not take on this responsibility yourself, our firm will be happy to provide a solicitor to take on the role.
Report the abuser
If the person you suspect is abusing their position under a power of attorney, we can help you to report your worries to the Office of the Public Guardian (OPG) which can investigate and demand that the attorney produce accounts, information or documents to show how they have managed the vulnerable person’s finances.
If abuse is found, the OPG can apply to the Court of Protection to have the attorney stripped of their powers and, in extreme cases, make orders barring them from having contact with the person they have abused. We may also be able to bring court action to recover any misappropriated assets.
How our solicitors can help
If you are worried that someone is a victim of financial abuse, our experienced private client solicitors can help in a number of ways, including:
- Advising you on the situation, the evidence you should try to collect and your options to protect your loved one.
- Drafting a lasting power of attorney, complete with all the necessary checks and balances – such as putting restrictions on your powers as an attorney.
- Help you find a suitable professional to assess someone’s mental capacity.
- Drafting a report to the OPG which outlines what form of abuse is suspected and preferred courses of action.
- Handling all the paperwork and providing representation if a court order is required for a deputyship, appointeeship, or to claim compensation.
- Taking on the role of a deputy or an appointee if you would prefer a professional to oversee your loved one’s financial affairs.
For further information, please contact Laura Redding, Head of Court of Protection in the Private Client team on 01905 721600 or via email worcester@parkinsonwright.co.uk
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.