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Former PFS chief warns financial fraud in families is overlooked

Former PFS chief warns financial fraud in families is overlooked
 Financial Vulnerability Taskforce chairman Keith Richards

Financial fraud and abuse between family members is “overlooked” and requires “more research”, according to an industry report published today (October 11).

The Financial Vulnerability Taskforce, an independent body chaired by the former Personal Finance Society chief executive, Keith Richards, has criticised the “lack of national research” into theft and fraud within families, which the report said has left many without financial security.

The taskforce, designed to action the PFS’s newly launched vulnerability charter which now houses some 1,000 signatories, has called for more industry-wide discussions on all aspects of financial abuse within families - be that theft, fraud, coercive control, extortion, grooming or scamming.

Specifically, the taskforce has asked the industry to “unite” under a common definition of intergenerational financial abuse in order to prevent it and, in cases where it can’t be prevented from the outset, reduce the harm it can cause.

The report cited case studies such as an elderly citizen with dementia living in a care home paying their children more money than they want to, as well as younger citizens with physical disabilities that leave them vulnerable to siblings or parents taking control of their assets.

It said hundreds of thousands of pounds are lost to this type of fraud. 

It cited Norfolk County Council, which has established a Financial Abuse and Safeguarding Officer and which between August 2019 and August 2020 had recovered £154,000 in one off payments and £19,000 in monthly payments. During this period it had received 160 referrals for action.

   A consequence of the industry harbouring no common definition of family fraud, the report warned, has been the significant care fee debts which can ensue, “many of which are then paid for by local authorities”.

It added: “There appear to be few criminal prosecutions or civil cases brought by authorities to try and reclaim money from relatives.

"We may need to draw parallels with the investigation and conviction process for benefit claimants who defraud the system and consider at what point does spending a relative’s money become a criminal offence?”

The report outlined a number of aims to reach a common definition of family fraud. These included more alignment between agencies appointed to investigate suspected financial abuses, as well as the production of an all-party parliamentary report seeking official recognition of the need for further research.

The vulnerability taskforce's latest report is already endorsed by the all-party parliamentary group for insurance and financial services.

Craig Tracey, MP for North Warwickshire and chairman of the APPG, said: “We need to better understand the scale and nature of financial abuse in families.

“Only then can we move forward together to ensure it is both prevented and responded to effectively.

"The potential scale of this threat to our loved ones and the consequences across society are simply too great to be ignored any longer, so I commend this report to colleagues across the house who I know share my desire to build back better from this pandemic.”