Suspecting a Power of Attorney of financial abuse: what can you do?

What steps should you take if you suspect someone is committing financial abuse as a Power of Attorney? Coodes’ Paralegal Jenny Carter explains…

Unfortunately, cases involving a Power of Attorney suspected of financial abuse are all too common. According to the Office of the Public Guardian, 2,080 investigations were carried out in 2020/21 into Attorneys and Appointed Deputies suspected of misusing or abusing their position.

What is a Power of Attorney?

A Lasting Power of Attorney (LPA) is a legal document you can use to appoint one or more people to make decisions on your behalf in case you become physically or mentally incapacitated in the future. You can have an LPA for health and welfare and/or another for property and finances.

A Power of Attorney will appoint an Attorney – this is a legal role that holds significant power. An Attorney is authorised to make decisions on behalf of a person who has granted the power (the donor).

The donor may be a vulnerable person and might not have the capacity to make decisions themselves. The individual may still have capacity but want someone else to handle their financial affairs. The donor may also be losing capacity and want to appoint someone to manage their affairs in preparation for when they lose capacity.

A Deputy is a similar role to an Attorney, usually a professional or a solicitor, although they are appointed by the Court of Protection by way of a Deputyship Order.

What steps should you take if you suspect financial abuse?

A family member may be alerted to financial abuse by a Power of Attorney – they might stumble across bank statements in the donor’s home and see several questionable transactions or payments. They may spend money in the wrong way, not keep adequate accounts or use money to benefit themselves.

In some circumstances, it may not be until after the donor passes away that the financial abuse is discovered by the Executors. You may wish to contact a solicitor to discuss your options if this is the case.

It may be that financial abuse by a Power of Attorney has taken place over a significant period and finding suspected evidence raises the initial concerns.

A Power of Attorney is often more likely to take advantage of the situation if the donor does not have the capacity to make their own decisions or may be less likely to understand what is happening in relation to their financial affairs.

If you are concerned about someone’s welfare, it is also worth making a safeguarding report to the local council Adult Social Care department – the council may not investigate financial abuse, but their investigation may raise issues of neglect. Often the two go together.

How to remove a Power of Attorney

Tensions or disagreements between family members may lead to an application to remove someone from their role as Power of Attorney. If you want to remove a excPower of Attorney because you suspect financial abuse or misuse of their position, the following steps should be considered:

• Gather evidence – The first step in making an application to remove a Power of Attorney is gathering evidence. This might be difficult to access financial documents if you are not the Attorney but get together what you can.
• Contact the Office of the Public Guardian – Consider making a report to the Office of the Public Guardian so they can investigate the circumstances. They will ask you to support your claim with evidence. They will make a decision based on the evidence and provide you with a copy of their report.
• Alert Action Fraud – You could contact Action Fraud, the national fraud and cybercrime reporting centre. This might help to strengthen evidence submitted as part of any potential criminal fraud investigation.
• Contact the bank – If you suspect irregular transactions have been made, a bank or building society may freeze an account to stop further transfers or withdrawals being made, although this happens less frequently. It is often in limited circumstances that a bank or building society can take immediate action.
• Get advice from an experienced lawyer – if you have any suspicions contact us in the first instance and we will be able to provide advice and guidance.

The process of removing a Power of Attorney

The first step would usually involve writing to the Attorney to raise concerns in a conciliatory way – setting everything out, asking the Attorney for an explanation and to provide receipts and information about the transactions.

There may be a genuine reason behind the transactions, however, if a response is not forthcoming or satisfactory or there is no explanation, applying to the Court of Protection to ask for the Attorney to be removed could be a way forward.

Once an application is made and evidence submitted, the Attorney has a set period to respond. The Court will decide how best to proceed, but would normally order a hearing, with both sides present in front of a judge.

Depending on how complex the issue is, the judge may make a ruling on the day or choose to defer while they await further evidence or reports. The overall process to remove an Attorney can take anywhere between 12 and 18 months.

For more information

If you are concerned about the actions of an Attorney or want to remove a Power of Attorney, you should contact a member of the Coodes team. They can offer the first initial appointment for a fixed fee. More information about Powers of Attorney can also be found here.