Fraud is on the up, but probably not as you might expect, as recent reports indicate that the main culprits appear to be those who hold Power of Attorney over elderly family members. Those powers are then used to abuse the assets, and the result is quite shocking, with often hundreds of thousands of pounds being defrauded from the abusers’ often nearest family members.
In 2007, “enduring” power of attorneys’ were replaced by “lasting” powers of attorney, the main change being the requirement for the attorney to register it with the publicly operated Office of the Public Guardian, once the person subject to the Power of Attorney lost the capacity to manage their own affairs. It was anticipated that the registration would trigger objection by family if the registrant were seeking to take some advantage over the subject of the power. However, despite this supposed safeguard, accountants KPMG report that Power of Attorney registrations have more than doubled in the last four years, with almost 350,000 registered in the financial year ending April 2015, up from 150,000 in 2011. Other reports indicate that the Office of the Public Guardian is struggling to process registrations, a report in The Telegraph noting that new registrations were taking up to 3 months last year; the rates of registration have increased approximately 33% since then.
Identifying abuse by an attorney is one thing, ensuring it ceases is another. A study by solicitors Nuckolds showed that complaints to the Office of the Public Guardian are also growing, it has received more than 2,000 complaints about attorneys in 2014-15, according to the analysis of court data. Most complaints are likely to have been brought by attorneys’ siblings. Of the complaints, 743 were fully investigated and 254 cases were submitted to the Court of Protection, an 11% increase on the previous year. Family members have discovered that whilst the Court may, eventually replace the attorney with someone more appropriate, the punishment for abuse of the Power of Attorney is not as great as one might expect. A report by the BBC noted that a £190,000 defraudment, resulted in a sentence of community service, without any significant financial penalty or compensation for the victim and the family.
Professional attorneys hold bond insurance against which a claim can be brought and independently reviewed. However, family members will of course not be bonded. At EWS we work closely with our lawyer delivery partners and have been using our knowledge of litigation and insolvency to recover payments for victims of fraud using the tried and tested provisions of the Insolvency legislation available in the UK. Clients have been surprised at the relative affordability of engaging this service, given that costs are often limited to what is available to be recovered from the fraudsters and require relatively little or no funding by the victims themselves. If you have any questions regarding this service, contact us.