Protect your loved ones with dementia from financial abuse

Dementia patients are some of the most at-risk individuals for financial abuse. However, there are several steps you can take to ensure your family member’s safety.

According to the Alzheimer’s society, 850,000 people have dementia in the UK today and that number is expected to rise to 1 million by 2025. The chances of getting dementia for over 65-year olds are about 1 in 14. When the disease progresses, it can be hard to watch our loved one slip away, gradually losing the ability to care for themselves.

Dementia and fraud

Considering how upsetting dementia can be on your family members and those who wish to help, it may come as a shock that there are people out there who would use your family member’s vulnerability to their advantage, seeking to financially manipulate and abuse them for monetary gain.  Perpetrators of this kind of abuse prey upon dementia patient’s memory loss, reduced cognitive function and emotional instability.

Incidents of financial abuse of people with dementia are far more common than we would like to think. Published in 2015, the Financial Abuse Evidence Review by Age UK noted that ‘those who have dementia or reduced cognitive function are the subgroup of people who are most at risk of being victims of financial abuse.’ The report indicated that nearly 130,000 people aged 65 and over in the UK had suffered financial abuse. This, however, is a rough estimate as many cases are not reported.

Victims of financial abuse can be left bankrupt, unable to pay for the crucially important support and care that they need. Furthermore, financial abuse can be extremely emotionally traumatic for both the victim and their support group. So following a diagnosis of dementia or Alzheimer’s, this NHS website encourages patients to start getting support, making a Will, putting your papers in order, claiming benefits, appointing Lasting Powers of Attorney and planning for advance care, to name but a few.

In this article, our protection of the elderly team at Foys wants to go one step further by discussing measures which you can take to safeguard the financial affairs of your relative who is suffering from dementia.

What does financial abuse look like?

The Care Act 2014 defines financial abuse as a type of abuse which includes ‘having money or other property stolen, being defrauded, being put under pressure in relation to money or other property, and, having money or other property misused.’ This kind of abuse can start subtly and is often hard to detect. The abuse can take many forms and it is important to note that it is often associated with other kinds of abuse.

Examples of financial abuse could be:

  • Forging signatures on cheques
  • Taking pension payments or other benefits away from the person with dementia
  • Pressuring the victim to act as guarantor for a loan
  • Withholding money from the individual with dementia
  • Stealing money or belongings
  • Forcing someone to make changes in their Will, property or inheritance

Who are the perpetrators?

While phone and email scams are certainly out there to defraud your loved ones, it may surprise you that perpetrators of financial abuse are likely closer to home than you may think. In a study published by Age UK, they quoted a study which states that 70% of financial abuse is committed by close family members due to their proximity and previous relationship to the individual. Furthermore, almost 50% of financial abuse in the UK is carried out by ‘adult children’ – grown-up sons and daughters.

Individuals with dementia may also be vulnerable to those in positions of power who are in constant contact with the individuals. These individuals will attempt to either threaten or get very close to their victim in an attempt at extorting information regarding their possessions and finances.

The warning signs of financial abuse

Financial abuse can be hard to spot, especially when the victim has dementia and may not be able to remember the fraud taking place or have information about it. However, there are a number of warning signs of financial abuse that you can look out for:

  • Stress and anxiety expressed with the person with dementia
  • Money loss that can’t be explained
  • Signatures on cheques that do not fit their handwriting
  • Unusual purchases in bank statements
  • Large amounts of cash being withdrawn from the bank account
  • Notices of unpaid bills
  • Lack of money to pay for essentials when there should be sufficient funds

Three steps to protect one’s financial affairs

Dementia is a degenerative disease. This means that as time goes by your family member’s ability to make and remember decisions is going to decrease. Considering this, it is imperative that as soon as your family member is diagnosed with the disease you begin to implement plans concerning their financial future. Early planning ensures that they are able to make their own decisions while they still can. During these discussions it is important to ensure that there is a trusted and vigilant support network so, if possible, no one person is responsible for everything. Within these conversations, there are a number of frameworks and safeguards that can be put in place to protect the individual with dementia.

One of these vital frameworks is the Mental Capacity Act 2005. This act is vital in informing the early planning process. The act assumes a person ‘to have capacity unless it is established that [they] lack capacity’ and if not, facilitates decisions to be made on their behalf ‘in [their] best interest.’

Step 1: Appoint a Lasting Power of Attorney (LPA)

One of the best ways to safeguard against financial abuse is to plan ahead and appoint a trusted person to act as your attorney through a legal arrangement called the Lasting Power of Attorney (LPA). An attorney does not have to be a legal professional but someone who is trustworthy, financially-minded and will not take advantage of you when you are at your most vulnerable. More than one attorney can be appointed.

There are two different types of LPAs:

Property and Financial Affairs

This is where a person (known as a donor) appoints a trusted family member or friend (known as an attorney) to make decisions on the management of property, bills, bank or building society account, pensions and possessions held by the donor. Once the attorney is registered, he/she can start to act and make decisions.

Welfare and Health

This is where a person (a donor) appoints someone (an attorney) to make decisions regarding medical care and medical needs in the future such as the choice of a care home, healthcare provider and the choice of life-sustaining treatment. This can only be used once the donor can no longer make their own decisions.

LPAs must be error-free and must also be registered with the government through the Office of the Public Guardian. Considering the vital importance of LPAs, it is crucial they are completed and processed right the first time around. Contact one of our elderly care solicitors at Foys and you can be safe in the knowledge that this process is left in experienced hands.

Step 2: Create a Will (if they haven’t already)

If your family member has not made a Will, it is important to begin making one as soon as they are diagnosed. As time goes on, they may not be able to make clear and rational judgements so the earlier a Will is made, the safer you can be in the knowledge it is their genuine wishes expressed in the document.

When your family member is writing their Will, it is important that they attain medical evidence to indicate they are mentally fit enough to make independent decisions still. For more information about the importance of writing a Will and what it should include, follow the link.

At Foys, our specialised and professional Will solicitors can assist your loved one in creating their Will, making sure that the document is error-free and uncontestably against anyone who may challenge the validity of the Will later.

Step 3: Protect against phone and internet fraud

If you are not a full-time carer looking after your loved one with dementia, beware that fraud schemes such as spam emails and bot-callers pose a real risk to your loved one’s finances. A recent US study published by the Annals of Internal Medicine highlighted that people with dementia had a far higher risk of falling for these sorts of scams. This fact, coupled with the reality that most individuals above the age of 65 may not be the most tech-savvy, means that technological protection is crucial.

In order to proactively protect your relative with dementia and their financial affairs, it is worth making sure that your relative’s email accounts block all spam or junk mails. Furthermore, most phone companies offer systems which only allows calls from known phone numbers to be taken. Alternatively, you can set up an anonymous call rejection system on their landline.

Top 5 tips to lower fraud risk

1. Utilise online banking to track their money

Online banking can be your best friend when it comes to tackling fraud. By making sure that you have access to your family member’s account, you will be able to track their weekly spend, pensions, bills and any other direct debits coming in or out.

2. Make them known at their bank

While tracking one’s online banking can be extremely useful, sometimes fraudsters may trick them into withdrawing money in person at the bank. Many banks have internal structures in place to identify and monitor an account that is at risk, so make sure the bank know that your relative may be at risk of fraud.

3. Make an emergency action plan

Having a worst-case scenario plan is key to quickly react to unexplained money coming out of your family member’s account, especially when they have lost the ability to manage their own financial affairs. Contact the bank and all other relevant establishments in order to block the fraud. Reducing the amount they have in a bank and setting up a separate ‘rainy day fund’ is also a good idea. This way, your loved one has a backup of financial support.

4. Make sure any financial information is kept properly

When visiting the home or living accommodation of an individual with dementia, it is a good idea to make sure any sensitive financial information is taken and kept somewhere else. People with dementia may lose or misplace vital documents which could be used or misappropriated by someone else.

5. Create a checklist of valuable possessions

Value and organise valuable possessions that they own with a few trusted family members to keep tally of the location, price and number of possessions. This will help in quickly identifying if anything has been taken or stolen.

Foys can help individuals with dementia to plan for the future

At Foys, our solicitors have been championing the protection of the elderly for years now. Our elderly care legal experts have solid experience in helping senior people plan and safeguard their legal and financial affairs. We are here to provide any legal advice and support that you and your loved one may need.

To kick-start the discussions about Lasting Powers of Attorney, creating a Will, setting up a Trust, as well as advice on planning for care home fees and protecting one’s assets, take advantage of our FREE initial consultation by simply filling out our Online Form.

Alternatively, you can call your local Foys Solicitors office:

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This post is not legal advice and should not replace professional advice tailored to your specific circumstance. It is intended to provide information of general interest about current legal issues.

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