Banks have key role in preventing elder financial abuse

• COVID-19 has made seniors more vulnerable to financial abuse
• New banking code calls on staff to help seniors maintain control of their money
• “Inheritance entitlement” by adult children who believe parents’ money is theirs
• Misuse of enduring power of attorney enables elder financial abuse

Banks play an important role in identifying, preventing and responding to elder financial abuse, say QUT Law researchers Associate Professor Tina Cockburn and Dr Kelly Purser.

“Under the Australian Banking Code of Practice, banks have committed to training staff to act with sensitivity, respect and compassion towards vulnerable people,” Professor Cockburn, codirector of the QUT Australian Centre for Health Law Research, said.

“The Code commits bank staff to provide appropriate guidance and referrals to help them to maintain or regain control of their money.

“Elder financial abuse is often enabled by abuses of enduring power of attorney documents (EPAs).

“An EPA is an enduring legal document signed by a person (the principal) to enable someone else (the attorney) to make financial decisions on the principal’s behalf when that person has lost capacity.”

With colleagues, Professor Cockburn and Dr Purser conducted a study of 100 cases of alleged EPA-related abuse and found an EPA could be used by the attorney to take advantage of the principal’s trust and take money for their own purposes.

“The abuse is often by a family member or carer, particularly an adult child or children who believe elderly parents’ money is theirs,” Professor Cockburn said.

“This can lead to tension-filled family relationships, providing intense stress and anxiety for the older person.

“Older people can feel too ashamed to admit to being abused by a family member or they may fear retaliation and loss of that relationship. This can be a key barrier to older people accessing justice and information.”

Dr Purser said calls for EPA law reform include establishing a national register for enduring powers of attorney so banks could check who was entitled to access older customers’ bank accounts.

“Law reform to address EPA misuse should adopt a human rights-based approach that recognises older people have an inalienable right to enjoy a life of dignity, security and independence.

“Our research has found an urgent need for:

• more effective EPA education
• recognition of the pivotal role of families and friends in the lives of people under an EPA
• review of EPA laws
• better access to justice for victims of elder financial abuse under EPAs
• better understanding of the concept of ‘capacity’ and its impact on actions of attorneys, service providers and professionals.”

Dr Purser said their latest (2020) study had examined barriers to accessing justice for misuse of EPAs.

“We found many factors that hindered vulnerable older people from seeking redress of the abuse, including:

• cost of legal advice
• diminished or lost capacity
• lack of motivation to seek help
• geographical, financial, relational and familial constraints, including dependency on the abuser
• health and mobility difficulties
• isolation and poor social networks – which are heightened by COVID-19.

“Given the hidden nature of elder abuse and obligations under the new Banking Code of Practice, banks have a significant role in identifying, intervening and responding to elder financial abuse under EPAs.”

Submission: Enhancing Protections Relating to the Use of Enduring Power of Attorney Instruments – Consultation Regulation Impact Statement’ (February 2020)

Examining Access to Formal Justice Mechanisms for Vulnerable Older People in the Context of Enduring Powers of Attorney was published in the Elder Law Review.

Alleged financial abuse of those under an enduring power of attorney: An exploratory study was published in the British Journal of Social Work.

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