Posted on 26 Oct. 2015
Elder financial abuse – it's not just limited to family
By Slater and Gordon
Elder financial abuse occurs when a relationship of trust is manipulated to the financial detriment of an older person. While you may have heard it used in a family context, older people are also vulnerable in dealings with advisors or professionals.
The World Health Organisation defines financial abuse of an older person as being the “illegal or improper exploitation or use of funds or other resources of the older person”. The WHO definition captures abusive behaviour of friends and family members but also extends in some instances to that of professional advisors and institutions. Professional advisors, including solicitors, financial planners, insurance brokers and the like, may operate in a manner that amounts to professional negligence or in ways that takes advantage of their vulnerable older client.
Elder financial abuse and professional negligence in practice
From our experience we’ve seen older clients suffer financial loss through:
- Negligent advice from a solicitor on property transactions or asset management;
- Financial advisors recommending investments that are not appropriate in the circumstances;
- Financial institutions approving loans which are unnecessary or unaffordable – particularly where an older person may be asset rich but cash poor;
- Financial institutions acting on the instructions of a person who claims to be a validly appointed attorney without having regard to the existence or terms of any agreement appointing that person;
- A solicitor carrying out unnecessary work or overcharging;
- A solicitor acting on instructions of a friend or family member supposedly on behalf of an older person but where the effect of those instructions are to their detriment
In a recent case we represented an older client who was legally blind. Our client had appointed two friends as joint attorneys. One of these appointed custodians then proceeded to make substantial cash withdrawals from the client’s bank account. The effect of the joint appointment required both attorneys to sign all documents concerning dealings made on behalf of our elderly client. The bank neglected to obtain a certified copy of the power of attorney document. Had it done so, it would have realised it required both appointed attorneys to sign the withdrawal forms. In this particular circumstance, an out-of-court settlement was reached with the bank.
For more information or to find out how we can help visit the Elder Financial Abuse section on our website.
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