Financial abuse of the elderly - spot the signs

A recent case highlights the concerning issue of financial abuse of the elderly. Associate Matthew Morton explains the warning signs and what can be…

The recent case of David Barton and the £4 million fraud involving residents of his nursing home highlights concerns that solicitors are seeing an increase in financial abuse against the elderly. Financial abuse often occurs where a person has diminishing capacity to make decisions about their finances, and an individual abuses a position of trust to take control of the victim’s funds.  Often the victim of the abuse does not know that the funds are being taken, or in some circumstances, they no longer retain the mental capacity to decide whether it is in their best interests to agree to a request for their assets to be transferred.

How common is financial abuse?

The prevalence of financial abuse is difficult to quantify but a report commissioned on the “Study of Abuse and Neglect of Older People”, estimated that 1.2% of people over the age of 65 in the UK have suffered or are suffering from some form of financial abuse.  This would mean that there are approximately 130,000 people living in the community over the age of 65, who have suffered some form of financial abuse at some point since turning 65. The report does however concede that this may be a conservative estimate, and the suspicion remains that the true extent of financial abuse involving elderly victims is actually much greater. 

Who are the perpetrators of financial abuse?

The recent Barton case is unusual not only in the amounts taken from the victims but also in the fact that the defendant in those proceedings was not related to the victims. The statistics provided by the Court of Protection revealed that sadly there is a prevalence of family members being involved in the financial abuse with 70% of victims being abused by a close family member. Most commonly the financial abuse is found to be at the hands of the victim’s own children. In the random sample taken, there is a slight gender bias that may suggest that women suffer a higher proportion of financial abuse than men.

Who is at most risk of financial abuse?

There are a number of factors that will determine who may be likely to be a victim of financial abuse.  Most reports show that the risk increases with age, and that individuals who have dementia or reduced cognitive function, are at increased risk of falling victim to financial abuse.

Social risks also play their part with individuals with low levels of family support, and those needing help with daily living, for example, managing money, shopping, and housework, often being more susceptible for financial abuse.  A report commissioned by Age UK identified that 60% to 80% of financial abuse takes place in the home, and 15% to 20% occurs in residential care.

What are the warning signs?

Financial abuse can be difficult to recognise. Often the victim will be unaware that they are being financially abused. Even if the abuse is discovered it may not be reported due to the embarrassment of the victim and their fear of damaging relationships if the abuse is at the hands of a close family member or a person on whom they rely.

There is often a pattern of the victim becoming isolated from family and friends and an increasing amount of reliance being placed on a single person to the exclusion of other members of the victim’s family and friends. Often the victim will be prevented from meeting socially with family and friends without the perpetrator being present. A controlling relationship is often formed between the perpetrator and the victim which forms an obstacle to the abuse being discovered and the victim is usually isolated to prevent the abuse being discovered.

What preventative measures can be taken?

There is evidence that there is value in obtaining a Lasting Power of Attorney to appoint a trusted individual to manage the vulnerable adults’ assets. If an attorney can be identified when the potential victim has full capacity to nominate an individual they trust this will often act as a barrier to an outside influence gaining control of financial assets and abusing the victim. It is widely accepted that the preparation of a Power of Attorney appointing a trusted individual is often a wise step to take but it must be taken before the individual loses capacity. 

If the individual has no close family members, or if the family members cannot agree who should be appointed, then a professional attorney can be appointed.  This may include the appointment of a solicitor or an accountant, which should minimise the risk of the attorney abusing their position for their own financial gain. This route does of course involve professional fees for administering the assets but it is widely accepted that this measure will dramatically reduce the possibility of the party being subjected to financial abuse if assets are controlled by a professional.

What Are the Future Trends?

The question of whether financial abuse of the elderly is likely to increase is difficult to predict. The case of Barton was unusual as the sums taken were so large and the abuse went on for so long without being discovered but anecdotal evidence is that financial abuse of the elderly is becoming increasingly common. There are some trends and factors likely to influence the prevalence of financial abuse, including the increase in numbers of older people, the increasing number of people with dementia and cognitive impairments, and also the concentration of wealth in older generations.

The exemplary sentence of 21 years handed down by Judge Everett to Barton is a welcome indication that the Courts are willing to impose severe prison sentences on those subjecting elderly individuals to financial abuse. Family and friends of potential victims should be aware of the tell-tale signs of abuse and where concerns are raised enquiries should be made and reported to the authorities or the abuse can often be left undiscovered.

Matthew Morton is an Associate and leads the Disputed Wills team at national law firm Weightmans LLP

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