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New LPA increases scope for fraud and abuse

'Given the nature of an LPA, such abuse may never be discovered,' warns Fiona Heald

24 August 2015

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The new Lasting Power of Attorney (LPA) process removes critical consumer safeguards and could lead to abuse of the system, Fiona Heald has warned.

The process was introduced by the Office of the Public Guardian last month to increase take-up of LPAs in England and Wales.

"We welcome any initiative that encourages people to put in place an LPA; however, simplification must not mean greater scope for fraud or abuse," said Fiona Heald, head of the Court of Protection team at Moore Blatch

"Given the nature of an LPA, such abuse may never be discovered, especially where it is enacted for mental health reasons, as the 'applicant' may never be in a position to expose the fraud."

Of greatest concern is the fact that a certification page exists where a third-party certificate provider signs to say that the donor understands what is being signed and that no one has pressurised him/her into signing it. However, there is now no way of checking whether the person who is signing this part of the form has the relevant qualifications to do so.

"The Office of Public Guardian does not have the resources to check if the Power will work; they only police those that are not made in accordance with the legislation, so if someone makes an LPA with incorrect provisions which make it useless, it will still be registered," warned Heald.

"Unfortunately, people think if the LPA is registered it is all OK, but that is not the case, and they often find this out when it's too late."

Another concern raised is the removal of the need to notify third parties of the fact that a LPA has been registered, thus removing a safety net whereby coercion or fraud may be identified.

At present, only around 15 per cent of people over the age of 75 have an LPA. This may be due to a general lack of awareness of LPAs, a lack of willingness to accept the need for an LPA and the perceived and actual complexity of putting one in place, according to Moore Blatch.

The firm noted that common issues with the incorrect completion of an LPA include:

  • incorrect use of specific terminology such as the use of 'must' or 'shall' as a definitive statement;

  • use of ambiguous phraseology that is open to debate where one or more attorneys are appointed;

  • incorrect or conflicting appointments of attorneys that could prevent the effective or total ongoing management of a person's financial affairs or decisions relating to their health and welfare; and

  • failure to take account of the likely future preparedness of attorneys whether it's their own health, desire or ability to manage what can often be challenging emotional or financial decisions.



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