The number of investigations into complaints of lasting power of attorney misuse has risen by 45% over the last year, Royal London has found via a Freedom of Information request.
There were 1729 investigations into the actions of attorneys and deputies in the 2017/2018 tax year – a sharp increase from 1199 for the 2016/17 tax year. However equity release lenders haven’t seen this trend in the sector.
Andrea Rozario, chief corporate officer Bower Retirement Services, said: “Personally we haven’t seen an increase in complaints and still believe taking out power of attorney is an important step but customers have to choose someone they trust and are comfortable with.
“Misuse by it has to be considered but shouldn’t put people off taking it because if they lose mental capacity, they won’t get the financial planning they need.”
Dean Mirfin, director at Key Retirement, said: “Whilst we see many cases involving POA our advisers and monitoring staff as well as lenders take a very detailed involvement in what the money is to be used for.
“Ultimately the attorneys should be behaving and acting in the best interests of the client. A lot of interest is paid to what the money is to be used for to ensure there is an appropriate use.
“A good example would be where the money is being used for home maintenance or to meet household bills etc.
“If there appears to be a potential abuse of power we will question this and sometimes, this may not be deliberate, it can be that the attorney is acting in good faith but in a way that is not permitted. We have prevented such cases from proceeding.”
They have proven popular with more than 2.3m registered with the Office of the Public Guardian by April 2017. These were split into almost 1.6m covering property and financial affairs and a further 732,000 relating to health and wellbeing.
Simon Chalk, managing director and laterliving planner at Laterliving now, said: “As it happens, a good 30% of my client work is through attorneys and deputies. This is principally because I major in equity release for care meeting care fees.
“In my experience, most advisers, equity release providers and conveyancing solicitors have robust procedures for ensuring the validity of an application made under a power of attorney.”
He said that these can include sight of the original document bearing the seal of the Office of Public Guardian and there’s often further checks with the client’s own GP or confirmation from the OPG that the order has not been repealed.
He added: “Identification and proof of residence for the attorneys is routinely required also. That said, I do find that often attorneys (and donors for that matter) confuse the role with that of an executor if a Will.
“I tend to agree with the research I saying that attorneys should be better informed about their duties, which is to put the donor’s needs first and last. Whatever the donor may have wished for in their Will is of no concern to an attorney.
“If in any doubt both attorneys, advisers and lenders can go to the OPG to seek clarification.”
Royal London now wants more education given to people with power of attorney over what they can and cannot do.
Helen Morrissey, personal finance specialist at Royal London said: “When done properly the attorney fulfils a vital role in safeguarding the interests of the person they are acting for.
“However, the sheer number of investigations into the actions of attorneys is concerning and action needs to be taken to curb poor practice.
“While there have been instances where people appointed as attorneys have used their position to steal money from the person they are acting for, there are also instances where the attorney has unwittingly stepped beyond the boundaries of their responsibilities or have neglected to keep up to date records explaining what they have done and why.
“People taking on these responsibilities need clearer guidance on what they can and cannot do.”