What is financial abuse?

According to Age UK, each year, around 1 in 12 (940,000) older people falls victim to a scam.

Some researchers have claimed that between 1 and 2 percent of people aged 65 or over in the UK have suffered or currently suffering financial abuse since turning 65.

This would mean approximately 130,000 elderly people are currently suffering from this abuse.

With a growing elderly population, financial and economic pressures and the advances in technology, this significant and devastating problem will only worsen in coming years.

What is financial abuse?

Financial abuse comes in many guises but involves the violation, which may be illegal, unauthorised or otherwise improper, of a person’s rights in relation to their property and finances.

It can include:

• the use of the person’s bank debit or credit card without their authority,
• borrowing money and not repaying it,
• being charged excessively for a service,
• charging for a service (e.g. care provision) that is not actually provided,
• unauthorised control of access to money or benefits,
• transferring title deeds out of an owner’s name,
• misuse of benefits or other income,
• misapplication of Local Authority direct payments,
• internet and postal scams;
• applying pressure to change a person’s will or to create a Lasting Power of Attorney in favour of the abuser
• applying pressure to give away assets or make gifts
• identity theft
• romance abuse and predatory marriages (which involves grooming for financial gain)
• abuse of authority by financial Deputy or Attorney.

Section 42(3) of the Care Act 2014 includes within the definition of financial abuse:

1. Having money or other property stolen
2. Being defrauded
3. Being put under pressure in relation to money or other property; and
4. Having money or other property misused.

Economic abuse is included as a category of financial abuse recognised under the Domestic Abuse Act 2021 and defined as “any behaviour that has a substantial adverse effect” on the vulnerable adult’s ability to:

1. Acquire, use or maintain money or other property, or
2. Obtain goods or services

And which is carried out by someone “personally connected” to the abuser.  The personal connection requirement is quite wide and will cover step-relatives and cousins.

What is a vulnerable adult?

An adult who is at greater risk of financial abuse. Thus, people with care and support needs tend to be at higher risk of abuse.

The significance of mental capacity

Whilst this might appear to be an obvious point, those who lack capacity may be at greater risk of financial abuse.

The Mental Capacity Act 2005 provides statutory guidance on assessing capacity and a raft of cases provide additional guidance and standard for assessment in a number of specific areas as follow:

• Capacity to make a will 
• Capacity to litigate 
• Capacity to make a gift 
• Capacity to make a lasting power of attorney 
• Capacity to revoke:
• an enduring power of attorney 
• a lasting power of attorney 
• Capacity to manage property and financial affairs

Where the vulnerable adult lacks capacity there is significantly greater scope for financial abuse to take place.

Signs of financial abuse

Concerns may arise where there is seen to be:

• A pattern of items going missing
• Unpaid bills
• Isolation from friends and family
• Unexplained bank transactions and/or transfer of funds and assets
• Sudden and unexplained changes to the pattern of expenditure
• Sudden involvement of previously uninvolved individuals
• Changes in standard of living
• Evasive or uncooperative behaviour of those involved in the care, support or financial management for the individual

How to report financial abuse?

Where there are any suspicions of abuse there are several steps that can be considered:

• Safeguarding referral to LA safeguarding team
• Safeguarding referral to OPG (in cases where the vulnerable adult lacks capacity and has an Attorney or Deputy in place)
• Make application to the Court of Protection to:
  1. appoint a deputy
  2. seek declarations as to capacity
  3. seek to prevent a named person from having contact with the vulnerable adult
• Report concerns to the Police:
  • Theft Act 1968 — Fraud by Abuse of Position
  • May be indicative of coercive or controlling behaviour which is a criminal offence
• Refer to financial ombudsman (e.g. for mis-selling)
• Report to government’s Money Lending Team of suspicious money lending.
• Consider an application to COP for the appointment of a financial Deputy
• Consider the appointment of an Appointee to secure and manage state benefits
• Make a referral to the DWP where concerns relate to an appointee.

Protecting against abuse

Prevention is always better than cure and there are some simple steps that you can consider taking to safeguard against future financial abuse:

• Put a Lasting Power of Attorney in place
• Put a professionally drawn will in place

If you have concerns about the financial abuse of a vulnerable adult, we can help and advise you in the steps that can be taken.