Banks and financial institutions are at the ‘coalface’ of identifying and stopping financial abuse and have a significant role to play in its prevention. However, a lack of training and awareness around the issue meant they were failing their elderly customers, an expert lawyer has told Australian Ageing Agenda.
Kirsty Mackie, principal of KRM Legal and chairwoman of the Elder Abuse Committee of the Queensland Law society, said she had recently noticed alarming trends in how banks were responding to financial abuse, offering incorrect legal information and failing to act on requests from enduring powers of attorney.
Ms Mackie said one of her clients had recently discovered her brother was financially abusing their father, who has dementia, by obtaining his signature on blank withdrawal slips. The client then, as her father’s enduring power of attorney, instructed the bank not to accept any such further transactions.
However, the client was told: “Demented or not, we will only deal with your father as he is the account holder. We will not deal with you.” Pressed further, the bank manager said it was against policy to follow the decisions of a power of attorney unless the document was registered.
However, Ms Mackie pointed out that in most states of Australia, there is no legal requirement to register a power of attorney document. Further, industry guidelines from the Australian Bankers Association, of which this bank was a member, state that banks have contractual obligations to follow their customer’s mandate, including recognising and responding to requests from an enduring power of attorney or administrator.
“The frontline staff just aren’t being trained properly,” said Ms Mackie. “There’s some fundamental errors going on that they could take some steps to address.”
In another case, a client noticed that his 92-year-old father, who had fluctuating capacity, had unusually withdrawn nearly $150,000 from his bank account in one month. He discovered his father had recently befriended a young woman in her 20s whom he was gifting cash, and upon further inquiries to police, found out the woman was a prostitute living with known fraudsters. He approached the bank branch to put a stop to these transactions, but was told he had ‘no authority’ to do so, even though he was his father’s enduring power of attorney. The son is now faced with taking the matter to tribunal.
“That shouldn’t happen. They shouldn’t have to take that extra step. The bank should listen to them; the enduring power of attorney has the same rights as the account holder and if they raise financial abuse, then the bank has an obligation to investigate it,” Ms Mackie said.
She said issues with financial abuse will only increase as the population ages, and banks have a corporate responsibility and community obligation to engage with the issue. Ms Mackie said while banks cannot be expected to act as lawyers and test for capacity, there is enormous responsibility to act in their client’s best interest, and that if they see unusual transaction patterns, they have an obligation to investigate.
In the same way that banks protected credit card owners from fraud by monitoring signs of unusual spending, she said banks had a role to play in protecting an older person from abuse.
Work with the community
Ms Mackie said elder abuse was “everyone’s business…. whether it’s council workers or bus drivers, or bank tellers or retail shop assistants” and that the issue needs a whole-of-community approach.
In this vein, Ms Mackie said she hopes to see financial institutions engage further with the elder abuse sector into the future, and said that banks’ policies on the issue would be best assisted and drafted if they worked collaboratively with those in the field. She said policy also needs to be constantly reviewed, as with modern technology, new ways of committing financial abuse were always emerging.
Problems with legislation
Ms Mackie concedes that some of the issues that banks have with power of attorney may be due to the difficulties in verifying the document due to variations between states, and called for a national approach to legislation.
Her comments echo recommendations from a study released earlier this year by the University of Western Sydney, The Cognitive Decline Partnership Centre and Council of the Ageing NSW, which called for uniform federal legislation and a national register to allow banks to more easily verify the documents, stating problems with documents were facilitating financial abuse.
“I think the general misunderstandings of powers of attorney are very widespread. That’s not helped by every state having a different system and different form,” Ms Mackie said.
She said targeted training for staff focused at a state-based level was required.
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