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Why New Powers of Attorneys Act Will Not Stop LPA Fraud

Posted: Wednesday, 7 February 2024 @ 16:55

Last year the Powers of Attorney Bill received Royal Assent and became an Act of Parliament. The Powers of Attorney Act 2023 makes changes to how lasting powers of attorney (LPAs) are made in future. 

The Act aims to make the LPA process easier to access, simpler and apparently more secure from fraud and abuse.

Given many people do not think about LPAs until later on in life, it is often the elderly who find themselves the victims of identity fraud which is a key focus of the Act.

The changes include :

  • Only permitting the donor to apply to register an LPA, removing the ability for attorneys to do so under the current rules.
  • Enabling the parties to an LPA (the donor, attorney(s) or certificate provider) to choose whether to sign the LPA digitally or on paper, or by a combination of the two.
  • Widening the group of people who can raise objections, including people not named in the LPA. 

All well and good. 

The LPA changes will address such problems found out by an investigation by the BBC Radio 4 consumer programme, You and Yours who spoke to one victim whose empty home was targeted by fraudsters who obtained an LPA without any proper checks. The fraudsters briefly visited the woman’s home to change the locks and then tried to sell it using the LPA.

This has been a catalyst for the new law.

However the new Act once it is implemented will not actually address the real LPA fraud which is going on.

From my experience, nearly all the LPA fraud I see in my capacity as a lawyer is actually done by family members using a perfectly valid LPA document for which the elderly relative has often received legal advice.

None of the amendments within the new Power of Attorney Act will do anything to address this fraud because it will not increase the level of scrutiny of the LPAs in place.

With the rising numbers of LPAs(which the new legislation will lead to and increasing elderly population), this fraud will increase. 

Most LPA fraud is not actually discovered until after the Donor of the LPA has died.

Then it is up to the Executor of the Deceased/Donor to investigate. 

Most LPA fraud of this kind is not reported to the police and remains under the radar as far as the public is concerned.

If the fraud was reported to the police, the more likely response is that this is a civil matter.

An alternative course of action is to report this to the Office of Public Guardian,(OPG) 

The OPG has a legal duty to investigate complaints or concerns about the actions of deputies, registered attorneys and people acting under an order of the Court of Protection. 

However, that legal duty ends when the deputyship/attorneyship ends which is when the Donor dies.

The only way the OPG can get involved after death is if you have a deputyship situation and they  can get the deputy to produce a final report.

This does not apply to LPAs so it is really a case of a victim of financial abuse having to be very proactive after financial abuse has happened.