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Protecting Against Financial Abuse: Legal Measures for Clients

Date Added 13.03.24

Anyone can become a victim of financial abuse and while it is more common that the individuals who experience this type of abuse are partners or ex-partners, it is not solely limited to intimate relationships. Financial abuse can also happen between friends, family members and those providing care to the vulnerable.

In the caring environment, the victim can be elderly, vulnerable or someone who relies emotionally or financially on their abuser.

The risk of financial abuse is on the rise due to many reasons including:

  • The current economic situation;
  • Sociocultural factors;
  • Isolation;
  • Physical and mental health issues;
  • Technology.

The Office of National Statistics reported in 2020 that in England approximately 1.5 million older adults experienced some form of financial abuse.

The statutory definition of financial abuse, set out in the Care Act 2014, defines abuse as that which includes having money or other property stolen, being defrauded, and being put under pressure in relation to money or other property, or having money or property misused.

Legal Measures

The Mental Capacity Act 2005 (‘the MCA’) was introduced to protect individuals who may lack the mental capacity to make their own decisions. The MCA provides a legal framework and serves to promote and safeguard decision-making.

If an individual has assets that need to be protected and they lack the capacity to manage those assets, it is possible to make an application to the Court of Protection to be appointed as that person’s deputy. The deputy would be able to safeguard the individual’s financial affairs and involve third parties to seek to recover any money that may have been misappropriated.

One way to safeguard yourself from financial abuse is to appoint someone you trust as your attorney to manage your financial affairs and, crucially, to enable your attorney to step in at a time of emergency, to take immediate action to support and safeguard your affairs.

A Property and Financial Affairs Lasting Powers of Attorney enables you to appoint another person to assist in decisions surrounding your financial affairs (a separate form can also be used for health decisions). These documents can be adapted to provide further safeguards, for example, requiring the attorney to send bank statements to a trusted third party (e.g. an accountant or solicitor) who can oversee transactions.

Who should be your attorney?

Age UK conducted a report in 2015 which detailed that the most reported perpetrator of financial abuse in the UK was ‘family’ with 50% of cases done by ‘adult children’ (sons and daughters).  Therefore, choosing the right person to act as your attorney is of vital importance since you are, effectively, giving your chosen attorney full access to all of your finances.

Clearly, your attorney should be someone you trust, but when thinking of who to appoint as your attorney, consider the following factors:

  • How well does your chosen attorney know you? Do they know who you bank with? Or what regular payments you may make? What information will they need to be able to properly support you in the management of your financial affairs?
  • Do they have the relevant experience to be able to manage financial decisions? Your chosen attorney should be competent and capable of managing their finances. Why would you appoint someone to look after your money if they cannot look after their own?
  • Does your attorney live close by? While we live in a modern age, and most banking decisions can be made with the click of a mouse, how available will your attorney be? Supporting someone in the management of their affairs can take a lot of time, if your attorney has a busy life, will they be able to take the time to support you?

Safeguarding against Financial Abuse

In such a technological age, where contactless payments have taken over the use of cash, and face-to-face banking has been replaced by Internet banking, the opportunity to be caught by scammers and to become a victim of financial abuse has become increasingly prevalent.

To safeguard yourself from such financial abuse, there are some practical things to consider:

  • Create strong passwords with random words (rather than, for example, your first family pet) and don’t always use !1 at the end of your chosen word;
  • Get ‘No Cold Calling’ stickers for your door to prevent unwanted calls to your door;
  • Use the Telephone Preference Service to reduce the number of marketing calls or a Mail Preference Service to reduce the amount of junk mail that can be received;
  • Speak about financial matters with your family so that they know what your financial position is and how you want your finances to be managed;
  • Speak with your bank if you have been diagnosed with a condition that may affect your ability to manage your affairs. They may be able to provide extra support;
  • Monitor your bills and your bank statements for any unusual transactions or withdrawals.

Reporting Financial abuse

Sometimes regardless of how much you try and protect against financial abuse, it still occurs. If you are concerned that someone may be the victim of financial abuse you should raise a safeguarding concern with your local authority. This is because The Care Act 2014 confirms that there is a duty for local authorities to promote individual well-being and this includes ‘protection from abuse and neglect’. Raising a safeguarding concern can be done on either the local council’s website or by calling the Adult Social Services team and discussing your concerns over the phone.

Safeguarding is raising the alarm when an elderly or vulnerable person is experiencing a form of abuse or neglect. The enquiry is normally led by a social worker, but it may include other agencies if the allegations are serious. There may be times when immediate action is needed for example if there has been criminal activity. Therefore, the local authority will also have a duty to speak with third parties such as the police, the NHS, GPs or a care provider, if required.

Talk to Tollers

Our Elderly and Vulnerable Client Unit (EVCU) team has a proven track record when it comes to recovering assets lost to financial abuse for our vulnerable clients.

To find out more about protecting against financial abuse… Talk to Tollers on 01604 258 858 or email EVCU@tollers.co.uk.

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