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Fraudulent use of Power of Attorney

The October 2013 edition of "Accountancy" includes a small piece on an accountant who swindled an elderly widow out of over £180,000, under a Power of Attorney.  Whilst having broad knowledge of Powers of Attorney, the views of those more expert in the field would be appreciated, in respect of the legal safeguards.  My specific interest has been aroused by a friend who has suspicion that an elderly lady friend of his may have been similarly swindled arising from a Power of Attorney effected approx. 4 months ago. 
I have not researched this matter yet at all and the views of those members more experienced in the field would be greatly appreciated.


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By pembo
03rd Oct 2013 16:13


on the scope of the POA and whether the attorneys powers are limited to dealing with one area or are unlimited. Can be dangerous with a single POA and good practice is usually to have a joint POA so that authority has to be agreed by both (as opposed to severally). Otherwise there is no real safety guard other than with things like selling a house where permission of the owner would be needed by the solicitors (unless of course they're at it as well !) unless the POA has been lodged at the OPG. When you lodge a POA at the OPG (when someone become mentally incapable usually) you have to circulate certain categories of relatives so there is a safety valve there in principle but if someone is corrupt you will still have an issue. This is why elderly people with few relatives/friends are so vunerable.

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03rd Oct 2013 16:55

The safeguards are in the drafting

And in the choice of attorney.

Joint ones are best and a combination of a professional and a close family member should be considered.

Not sure about solicitors checking with the owner on a house sale.  What if the owner is gaga and the house needs to be sold by the attorney to fund care fees?

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By pembo
03rd Oct 2013 17:08

thats the point

of registering the POA with the OPG. You must register as soon as the owner is deemed gaga. Solicitors will always check with the owner unless the POA has been registered that QED means the owner is gaga (or mentally incapable to the politically correct !)

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03rd Oct 2013 21:24

Powers of Attorney

There is more than one type of 'power of attorney'.

I suspect the OP has in mind a 'lasting power of attorney' in relation to a person's property and financial affairs.

There is some guidance available HERE.

However the key issue is to choose someone (or preferably more than one person) who can be trusted to act properly (i.e. in accordance with the legal requirements) and in the best interests of the person whose affairs he / she / they are given power over.

A solicitor or an accountant who is a member of one of the major accountancy bodies is also subject to professional regulation (and professional indemnity insurance) in relation to acting under a PoA.  (Incidentally insurers can get interested in PoAs because of the risk of a claim!)  Of course you cannot be certain that even a solicitor or accountant will behave himself.

If problems arise then you can contact the Office of the Public Guardian or you can instruct an independent person to try to investigate - but that costs money and may not get very far if the person holding the PoA is obstructive!


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04th Oct 2013 09:19

Yes but..

I take your point Pembo, but the courses I have been on recomend that you register the LPA with OPG as soon as you do it.  On the basis that the OPG works at a snails pace, if you only send off the LPA when the donor is actually er. 'mentally incapable' then you will have a problem if/when OPG takes months to register it.  And yes, I have had one that actually took 12 months to register for no good reason.


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By pembo
04th Oct 2013 17:24

horses for courses

I did mine for my mother recently and it came back in 6 weeks. Mine was admittedly straightforward in so far as the grown up grandchildren were the notified relatives.Suppose you could hit problems if there were family issues as someone may kick off and delay the process.

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