Third-Party Witnesses Could Lead To Financial Abuse Of Elderly Running Rife

Financial abuse cases in the courts could rise due to people taking advantage of relaxed safeguarding rules, experts have warned.

The caution comes after the UK lockdown prompted governing bodies to ease normal safeguards in order to make sure normal life could continue as closely as possible for the elderly and vulnerable who are shielding at home.

In April the Office of Public Guardian (OPG) recommended those self-isolating or shielding should execute a ‘third-party mandate’, authorising someone else to carry out bank transactions on their behalf, as well as a general power of attorney giving someone else authority to manage their financial affairs for them.

Financial abuse experts at law firm Irwin Mitchell are warning that these temporarily relaxed rules will have a long-term effect on will and financial abuse disputes and the Court of Protection if people take advantage of them.

Expert Opinion

“While the OPG’s advice might make practical sense, given the financial hardship many are under, coupled with the increasing dependency on others by those shielding at home, I’m concerned about the increased risk of financial abuse if people follow the OPG’s recommendations. It’s the perfect storm for financial abuse.”

“As soon as rules designed to protect the elderly and vulnerable from financial abuse are relaxed, that gold standard is no longer being applied, and these changes will almost certainly be exploited. The lack of face-to-face contact with professionals is particularly concerning as it means those wishing to exploit elderly and vulnerable people will have the space to do it in.

“It’s therefore likely we’ll see an increase in financial abuse matters in the coming years after the coronavirus crisis has passed. While the lockdown is a short-term measure, the effects of it will be felt for many years to come, and we will see this in the courts.” Nicola Bushby - Partner

The Equity Release Council has also modified its advice on safeguards and is enabling remote provision of legal advice for equity release customers. Normally, a face-to-face meeting with a solicitor is needed.

Mortgage witnessing for equity releases has also changed – any witnessing needed of a client’s signature can now be done by an independent adult witness of the person’s choosing, subject to identity checks. As a result, homeowners can now release equity from their home without a solicitor witnessing their signing of the mortgage deed.

Specialist will dispute lawyers are also advising that the courts are still ordering face-to-face mental capacity assessment if they are necessary.

“Notwithstanding the pandemic, the courts are still alive to capacity concerns. I have a matter where I obtained a very necessary order for a face-to-face capacity assessment because it was ruled that the risk to the vulnerable party of not having the protection of the court outweighed the risk of the assessing doctor bringing in coronavirus – so the courts are still actively safeguarding the elderly and vulnerable, even in these exceptional circumstances.

“Solicitors are well-placed to notice any financial abuse; that creates a responsibility on solicitors to understand their role in preventing it from happening and taking appropriate action.”