The Financial Ombudsman Service (FOS) published tips today, 4 February, to help banks and consumers avoid problems when supporting people who are losing the capacity to manage their finances. Complaints about Powers of Attorney are on the rise.
On average the body is receiving 30 to 40 new cases every month, up from 25-30 last year, often involving highly distressing situations.
Most of the issues relate to misunderstandings about what powers have been granted.
However, the FOS says most of these grievances could have been avoided by consulting a competent solicitor. The FOS is issuing new advice for bank staff and donors registering or appointed representatives that hold a Power of Attorney, to help alleviate the tensions.
A Power of Attorney is a way of granting one or more trusted people the legal power to manage your financial and legal affairs and/or your health and care options, on your behalf.
This authorisation might be needed if you’re out of the country for a long period of time, recuperating from an operation or if you are ill and concerned about losing mental capacity through a degenerative disease like dementia.
An LPA is a legal document that enables someone to act on your behalf when you believe you will lack mental capacity at some time in the future or no longer wish to make decisions for yourself.
LPA replaced the Enduring Power of Attorney (EPA) in England, Wales and Scotland in 2007 but not in Northern Ireland. EPAs that were made before 1st October 2007 can still be used, however these must be registered with the Office of the Public Guardian if the donor is losing mental capacity. The EPA only covers property and finances.
The donor - the person who gives authority to set up Power of Attorney - can still carry on managing their finances as well as the person they’ve appointed to act on their behalf. And even after Power of Attorney has been registered, your attorney/s will have to act within any restrictions or conditions you have set out in the LPA, EPA or OPA form.
Most of the complaints the FOS receives involving Power of Attorney problems are as a result of a bank insisting on original documents instead of taking copies, delays, lost documents, confusion over the powers granted, and incorrect/missing information on computer systems at the donor's bank or building society.
The Solicitors at Fergusson Law in Edinburgh can help you with this process and advise you how to prevent these problems.