Fraudsters Are Using Powers Of Attorney To Steal People’s Homes
The system for taking control of a person’s financial affairs is “wide open” to fraud, a BBC investigation has found.
They were concerned that the application process for obtaining financial Lasting Powers of Attorney (LPAs) has no routine identity checks or effective fraud controls.
An LPA is a legal document where a person (the Donee) gives their attorney authority to make financial decisions on their behalf.
The attorney can withdraw money from their bank account and even sell the Donee’s house.
Many people draw up LPAs so that a close family member can access their money and run their finances in the future if they lose mental capacity or become too physically frail to deal with this themselves.
The system is supervised by a government body called the Office of the Public Guardian (OPG). The OPG investigate any allegations of fraud.
In recent years, an online system was created for setting up LPAs. This replaced a more laborious paper system. The idea behind the new online system was to make the process more user friendly in the hope of encouraging more people to set up LPAs.
Many professionals expressed concern when the paper system was replaced with a digital system as they anticipated a rise in fraudulent applications. Fraudsters can now create an LPA online which will allow them to take over the finances of a victim who is not aware that the LPA has been created.
An investigation by the BBC Radio 4 consumer programme You and Yours has spoken to a victim whose empty home was targeted by a fraudster with an LPA in the victim’s name. The victim’s signature had been forged and their date of birth was incorrect. The fraudster pretended to be her sister but in fact the victim does not have any siblings.
The fraudster tried to sell the house using the LPA. Luckily the fraud was foiled when the conveyancing solicitors requested medical evidence to show that the victim was not well enough to deal with the matter.
The investigation established that a person with the same name as the fraudster had made various applications to local councils asking for the addresses of empty properties.
The annual report of the OPG warns of the risks of fraudulent LPAs being set up and says that they intend to introduce more safeguards against fraud.
One option would be to require all attorneys acting under an LPA to take out insurance cover which will compensate the victim if the attorney is fraudulent.
It is still a very good idea to set up a LPA in order to ensure that your affairs can be managed by a trusted family member or friend in the future if you are unable to do this yourself. However, urgent action is required to change the current system so that it is not easily exploited by fraudsters.
Our specialist wills & probate solicitors in London can help you and your family set up a Lasting Powers of Attorney. If you wish to talk through your needs with us please call us today on 0808 271 9413 or request a call back at your convenience.