Financial abuse is a growing problem for the 18 per cent of the UK’s 65.6m population who are aged 65 and above.
A recent review of evidence conducted by Age UK found that approximately 130,000 people over 65 who live in the UK have suffered financial abuse.
Although financial abuse can affect anyone, it is thought that older individuals are targeted because they are assumed to have more money and are perceived to be more vulnerable than younger people.
This article will consider measures that can be put in place to reduce the risk of an older person being a victim of financial abuse.
What constitutes abuse?
One of the difficulties with tackling financial abuse is that it can take a variety of different forms. The definition of “financial abuse” for the purposes of the Care Act 2014 includes:
- Having money or property stolen.
- Being defrauded.
- Being put under pressure in relation to money or other property.
- Having money or other property misused.
Scammers are increasingly targeting older adults by bank and investment fraud. There are frequent reports in the media of older people being conned into handing over their bank details or being duped into investing in dubious schemes involving property, vintage wine or rare earth metals
It right that investigating these kinds of scams will come under renewed focus when the new National Economic Crime Centre, announced by the Home Secretary last December, becomes operational.
The majority of financial abuse of the elderly is not, however, committed by fraudsters in boiler rooms many miles away. Research collated by Age UK suggests that 70 per cent of financial abuse is perpetrated by family members.
This insidious type of financial abuse involves family members or friends pressuring older people to part with cash or individuals befriending or ‘grooming’ an older person with a specific goal of taking money from them.
Lasting power of attorney
Losing mental capacity fills most people with fear, as does the prevalence of conditions such as dementia that affect people’s mental capacity.
According to the Alzheimer’s Society, there are currently 850,000 people with dementia in the UK, with numbers expected to rise to 2m by 2051.
The most important step that can be taken to guard against financial abuse in the event of reduced mental capacity is for the client to appoint a person or persons to look after their affairs should the client lose capacity to do so.
The appointee can be a loved one or an independent person such as a legal professional. Section 9(1) of the Mental Capacity Act 2005 requires this arrangement to be enshrined within a lasting power of attorney (LPA).
A donee is the person with authority to make decisions on behalf of the donor, for example, the person lacking mental capacity. The donor must possess mental capacity at the time of creating an LPA.