Financial abuse, misuse of powers of attorney and fraud

Understanding financial abuse and vulnerability

People may be vulnerable to financial abuse for a number of reasons. Those reasons may be age related e.g. old-age frailty, dementia or other cognitive disorders or a person might have learning difficulties or have suffered a serious injury.

The common factor in financial abuse cases is that the victim has to rely on others to support them with their property and financial affairs either because they do not have mental capacity to manage their affairs themselves or because they find certain tasks more difficult.

Support for vulnerable people can be formalised with a lasting or enduring power of attorney or deputyship order but support is often of a more informal nature e.g. by use of third-party bank mandates or joint bank accounts and it often falls to relatives to help manage a vulnerable person’s affairs.

Duties of attorneys, deputies and others managing finances

The vast majority of people take the role of supporting a relative or friend seriously and would never dream of abusing their position but there are those who seek to take advantage of the vulnerable for their own financial gain.

Attorneys and deputies are subject to legal duties to act in the best interests of the person whose affairs they manage but similar duties can arise in other situations. Attorneys and deputies also have a duty to keep accounts to demonstrate how they have been dealing with a person’s finances.

If those duties are broken, if transactions have taken place that call for an explanation or if there are otherwise concerns about conduct more generally, it may be possible to bring a claim on behalf of a vulnerable person (or their estate if they have since passed away) to recover any assets misappropriated by a person in abuse of their position.

While fraud is a specific criminal offence, the civil courts will seek to unwind fraudulent transactions and a civil claim may be made as well as or instead of criminal proceedings (e.g. where Crown Prosecution Service have decided not to pursue matters).

Situations we can assist with

We are able to assist in the following situations:

• Where funds have been withdrawn from a vulnerable person’s bank accounts without their knowledge or consent;
• Where a vulnerable person’s assets have been sold or go missing and the sale proceeds have not been accounted for;
• Where a vulnerable person has been ‘scammed’ or convinced to purchase goods or services they do not need;
• Where an attorney or deputy is refusing to provide information or is ignoring the concerns of family or friends;
• Where a professional is managing affairs and the fees they charge for doing so are excessive or unjustified; or,
• Where there are concerns about how a vulnerable person’s finances are being managed or by whom they are being managed.

Investigations, court proceedings and asset recovery

Often, in cases where there is a power of attorney in place or a deputy has been appointed, the first step will be to ask the Office of the Public Guardian (“OPG”) to investigate concerns.

However, if there is no formal appointment, if the vulnerable person has since died or if the OPG has already investigated and removed the previous attorney or deputy, it is possible to bring proceedings on behalf of the vulnerable person (or their estate) to recover money from the person that misused or misappropriated it.

Such claims can be difficult to make, the prospective defendant is seldom cooperative and may have attempted to cover-up any wrongdoing.

If money has been misappropriated, it may have been transferred to others or used to purchase assets.

Our approach is to consider recoverability at an early stage. We have successfully used freezing injunctions to protect assets for enforcement and we can help follow money or assets into the hands of accomplices or third-parties or trace money into assets purchased by the defendant.

We also act for those who have been wrongfully accused of abusing their positions in defending allegations of breach of duty, misappropriation and civil fraud.

Further information

Please see our FAQs below or get in touch with a member of the team today.