How to protect vulnerable family members from financial abuse
- 4th July 2022
Every year, millions of pounds are stolen, defrauded, or coerced from vulnerable people. There are signs to watch out for and steps you can take to protect your family.
Sadly, vulnerable people are more likely to be a victim of financial abuse. However, if you think a family member may be at risk, keeping an eye out for signs of financial abuse could prevent it from happening.
Financial abuse is when someone in a position of trust interferes in another’s ability to acquire, use or maintain their finances. It could be someone they know well or someone that is in a position of authority, such as a carer.
The elderly are more likely to be affected. According to charity Hourglass, at least £13 million was reported as stolen, defrauded, or coerced from older victims in 2020 alone.
People that are lonely, isolated, or in poor health are also more likely to be affected by financial abuse. AgeUK suggests that there are 1.4 million older people in the UK that are often lonely.
While financial abuse is a crime, it often goes unreported and isn’t always prosecuted. This is because it can be difficult to spot and prove.
7 signs of financial abuse to watch out for
Financial abuse can come in many forms and the signs can vary, but these seven could be red flags:
- Signatures on documents that don’t resemble previous signatures
- Sudden changes in bank account behaviour, such as the withdrawal of large sums
- The inclusion of additional names on financial accounts
- Sudden changes made to a will
- Numerous unpaid bills if someone is supposed to be handling payments on their behalf
- Unexplained transfer of assets, including material items, to a family member or someone outside of the family
- Deliberate isolation of a person from their family or friends.
Changes in behaviour and wishes don’t automatically mean that financial abuse is occurring. However, it can be a sign that you should speak to your family member and be aware of other changes that may happen.
4 useful steps you can take to reduce the risk of financial abuse in your family
1. Encourage them to name a Lasting Power of Attorney
A Lasting Power of Attorney (LPA) gives someone the ability to make decisions on their behalf if they’re unable or unwilling to do so. An LPA must be made while they have the mental capacity to make the decisions.
So, it means they can name someone they trust in case something happens. This can prevent other people from taking advantage of a situation by taking money for their own gain.
An attorney must act in the best interest of the donor.
However, iIf you suspect an attorney is trying to act beyond their powers or against the best interests of the donor, you can make a report to the Office for Public Guardian (OPG). The OPG will investigate and, if necessary, can remove the attorney by applying to the Court of Protection.
2. Speak to a solicitor to write their will
A will is the only way to set out your wishes about how you’d like assets to be passed on when you pass away. It can help reduce the risk of financial abuse as it gives a person a chance to clearly set out and record what they want.
Once a will is written, you should keep it in a safe place. This may be at home or with a solicitor.
There may be times when a person wants to make changes to their will or rewrite it. While this isn’t uncommon, if it’s unexpected it can be a sign of financial abuse.
If you have concerns that your loved one is being pressured into making changes to their will, you should contact their solicitor.
3. Help them track their income and outgoings
Regularly reviewing the income and outgoings of vulnerable loved ones can help you flag up unusual payments or suspicious activity. For example, has their regular spending suddenly increased or is their income being paid into a different account?
If your loved one is still able to make their own decisions, this is a good option as they’ll remain in control and you can sense-check their finances.
As well as current accounts that are used frequently, you should also review paperwork for pensions, investment accounts, property and so on.
4. Stay in touch with vulnerable family members
Scheduling regular calls or visits to a vulnerable family member means you’re more likely to spot signs of financial abuse. You may notice small changes in their behaviour, or they could mention something in passing that is a red flag.
What should you do if you suspect financial abuse is happening?
If you believe financial abuse is occurring, keep track of your suspicions and any evidence that you may have. You can report your concerns to the police or the adult social care team at your local council. There are also charities, including AgeUK and Hourglass, that may be able to support you if you have concerns.
You may also want to get in touch with trusted professionals that know the individual, such as their GP, solicitor, or financial planner.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
Information contained within this article is not a personal recommendation of Forrester Boyd Wealth Management. The wording in this article is not to be construed as an offer or advice. We recommend you seek advice concerning suitability from your investment adviser.