Fraudsters in the family – increasing abuse of the LPA
The end of last month saw the gov.uk website publish some valid examples of LPAs – why would they have done this? Perhaps it is because, according to a 2015 survey published by KPMG, the level of fraud within families grew by a shocking 384% last year with elderly people most at risk.
In the year ending April 2015, almost 350,000 LPAs were created. The defining aspect of an LPA is of course, the obligation on attorneys to act in the donor’s best interest.
KPMG identified that fraudsters were often the younger relatives who were taking advantage of their elderly family members. In 2014 elderly relatives in the UK had a total of £1.7 million stolen from them by younger relatives who had Power of Attorney over their finances.
Baby Boomer Fraudsters
The same survey revealed that 72% of fraud within the family was committed by the baby boomer generation – those who were over the age of 45. It clearly follows that this is not to be unexpected due to the fact that most attorneys are the children of elderly individuals.
Hitesh Patel, UK Forensic Partner at KPMG, said: “Fraudsters in the family are abusing their intimate knowledge and close connections to steal from partners and parents. People are living longer, and we are seeing examples of people who are choosing to remove uncertainties about when or if they will get their inheritance by fraudulent means.”
This is in no way a reason for absolution.
Revocation of an LPA
The above scenario has been increasing to such an extent that the Court of Protection are revoking LPAs in order to protect the victim’s best interest.
A recent and prime example is the case of Re ARL  EWCOP55 where an 86-year old mother of two adopted children, aged 59 and 52 had her son steal the majority of her financial assets. He sold her home and kept the majority of the proceeds for himself, which he claimed had been ‘borrowed’ due to difficult personal circumstances. The mismanagement of his mother’s financial affairs resulted in a debt of £39,000 which was owed to the Mother’s care home. The Court of Protection decided that the mother’s placement at her nursing home was in jeopardy and that she was at serious risk of eviction due to her son’s willful refusal to pay her care fees – his actions were not in her best interests and so the LPA was revoked.
In Re EG  EWCOP6 an elderly woman with dementia appointed two of her children as joint attorneys for her property and financial affairs. The children unashamedly abused the authority which was conferred upon them by the LPAs, making large gifts to themselves of around £20,000 – the Court revoked both LPAs.
An ageing population, the increase of dementia sufferers and the value of house prices are having a knock on effect to the abuse of LPAs. The revocation of LPAs in such circumstances as those above is clearly vital to protect the victim’s best interests, nevertheless as is often the case, the Court of Protection cannot repair the financial damage to the victim as the fraudster is unable to repay the money that was stolen.