How proposals could impact Lasting Power of Attorney security

Last month, the Financial Conduct Authority announced their proposals to move the Lasting Power of Attorney process even further online.  This would move away from the current position where the documents can be registered online but must have a physical signature. 

Once a LPA has been physically signed, at the moment the donor (the person making the LPA) would register the document with the Office of Public Guardian (OPG).  The FCA is suggesting that the whole process from start to finish move online, with no physical signature; instead donors would complete an online form.  “Their reasons arise from their belief that this move will reduce time and administration, however there are some true safeguarding concerns with their proposals,” explains Jane Cox, Private Client  Partner.

How does an LPA safeguard currently

“Several years ago, a Lasting Power of Attorney took over an  Enduring Power of Attorney, with the very purpose to bring in more safeguarding regulations,” continues Jane.  “Under an LPA, there are certain measures that must be undertaken to ensure that the donor has capacity to know what they are agreeing to, and the implications of those decisions.  The Certificate Provider, normally a Solicitor, will also takes steps to ensure the donor’s family have an awareness of the decisions being made, if they are not the attorney.  Without people having to meet these criteria, an online system could leave many people, particularly the elderly or vulnerable members of our society, open to financial and fraudulent abuse.”

A Lasting Power of Attorney is a legal document which allows appointed attorneys to manage the donor’s affairs should they not be able to do so.  There are two varieties of Lasting Power of Attorney; one for Health and Welfare, and the other for Finance and Property.  “To think that someone could have access to the donor’s bank accounts, and potentially empty their bank account, within a few clicks is extremely concerning,” continues Jane.  “According to Action on Elder Abuse, more than 160,000 over 65s are victims of financial abuse every year; a figure we should be striving to reduce, particularly with our aging population and increase in the number of people living with Alzheimer’s and dementia.”

Carer Cards 

The FCA proposals also included the possibility of a ‘carer card’, which would allow carers their own bank card to access their person’s account.  “The FCA’s justification for this is that banks would have a better audit trail as to who was accessing the account, allowing them to spot fraudulent or irregular activity easier than if a carer was using the person’s bank card with access to their PIN or password,” explains Jane.

“We appreciate that the world is moving more online, and by making the process more accessible more people could be open to create an LPA, as many are currently put off by the seemingly complicated process,” concludes Jane.  “It’s important however that the FCA create a fine balance between moving with the times, leaving people behind, and opening some up to fraud.” 

A Lasting Power of Attorney is the only way to ensure your wishes will be met should you lose capacity to make your own decisions.  Without one, your loved will need to apply to the Court of Protection to ascertain control over your affairs; an extremely timely and costly process.  If you wish to find out how a Lasting Power of Attorney could help you, contact Jane or the Private Client team on 01329 222075 or email privateclientenquiry@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.