Section 42 of the Act defines the circumstances within which a local authority has a duty to undertake a safeguarding enquiry (please see ‘Safeguarding under the Care Act’ for more details).
One of the triggering conditions is that an adult is at risk of or subject to abuse or neglect (s42(1)(b)) and what constitutes abuse and neglect is described in Chapter 14 of the statutory Guidance (14.16 – 14.32). However, the Act makes explicit reference to financial abuse (S42(3)) not because it has a particular priority status, but for the avoidance of doubt, because some definitions of abuse may not ordinarily include this type of abuse.
Section 42 (3)
“Abuse” includes financial abuse; and for that purpose “financial abuse” 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.
The statutory guidance for safeguarding gives more detailed guidance on situations of financial abuse than any other form of harm (Guidance 14.24-1432) and notes that “Financial abuse is the main form of abuse investigated by the Office of the Public Guardian” (Guidance 14.24).
Financial exploitation often co-exists alongside other abuse situations: “as research has shown, where there are other forms of abuse, there is likely to be financial abuse occurring” (Guidance 14.24).
In 2017/18 it was evidenced that 66% of abuse was perpetrated by someone that the adult knew (NHS Digital 2018).
Safeguarding staff must “recognise that adults sometimes have complex interpersonal relationships and may be ambivalent, unclear or unrealistic about their personal circumstances” (Guidance 14.7). There will be situations where an adult at risk expresses that they do not wish for any enquiry to proceed but evidence may indicate underlying factors are maybe contributing to this stance, such as control and coercion from a third party.
Anyone planning an investigation/making s42 enquiries into financial abuse will need:
· To consider welfare and prevention, alongside any investigatory actions.
· To work with the adult at risk to identify and manage their expectations and focus on their desired outcomes.
· To consider the breadth of remedies available to the person at risk of financial abuse.
· To have a well planned strategy which involves and utilises the skills of partners at the earliest opportunity
As with all safeguarding responsibilities, a partnership approach to preventing and addressing financial abuse is necessary and will include the requirement to establish policy and procedure to working with organisations such as Department for Work and Pensions (DWP), Trading Standards Services (TSS) and the Office of the Public Guardian (OPG).
A clear pathway for sharing of information is important as it is key to providing an effective and timely response to emerging concerns and ensuring that the appropriate organisation takes responsibility for supporting the local authority with the enquiry.
For example, if it is identified
· the perpetrator of abuse is a lasting power of attorney (LPA) or a court appointed deputy, it may be more appropriate for the OPG to investigate the actions of the Attorney or Deputy. (Guidance 14.61)
· the financial abuse arose from internet or postal scams or doorstep crimes, alongside reporting to the police, the TSS should be included in the investigation (Guidance 14.29)
· A DWP appointee is acting incorrectly, DWP should be notified immediately to support with provision of information regarding the appointee.
As safeguarding is supposed to be everyone’s business (this is not true as a matter of law or anyone’s legal duty just because they know about it, but is a good aim for the culture), should organisations, such as the above, be made aware of financial abuse or risk of it, the local authority should be made aware. This not only relates to the aforementioned organisations, but may also include collaboration from a wider spectrum such as shops and banks, taxi drivers etc.
Decision-making needs to take into account mental capacity and follow the framework of the Mental Capacity Act (2005) and its associated Codes of Practice. It must be remembered that even if an adult does have capacity to make a decision to ‘give’ money to a third party, they may still be subject to control and coercion.
The case of A Local Authority V DL, RL and ML (2010) reinforced that the use of inherent jurisdiction as a necessary and proportionate interference (para 66 and 76 of A Local Authority v DL & Ors) due to the allegation that DL was abusing his parents. It was argued by the local authority that the parents’ decision-making capacity was not impeded by an impairment or disturbances of their mind or brain (S2(1)) but as a result of the control and coercion imposed by DL. This would be a form of undue influence in civil law terms, which is a doctrine that can be used to unravel a series of transactions if the evidence of impropriety within a recognised relationship where influence is bound to be a factor, is strong enough.
The conclusions from this case, although it was appealed by DL (DL V A Local Authority & Others (2012) unsuccessfully, established that the inherent jurisdiction “can be exercised in relation to a vulnerable adult who, even if not incapacitated by mental disorder or mental illness, is, or is reasonably believed to be, either
(i) under constraint or
(ii) subject to coercion or undue influence or
(iii) for some other reason deprived of the capacity to make relevant decision, or disabled from making a free choice, or incapacitated or disabled from giving or expressing a real and genuine consent”
(Munby J, Re SA; A Local Authority v MA, para 77 [2005] EWHC 2942 (Fam)).
Necessary action will be decided on a case-by-case basis in a way that is appropriate and proportionate to the presenting circumstances and with as much involvement of the adult as possible, in relation to their capacity in the context of the issue they are living through.
Safeguarding for circumstances of financial abuse, as with all safeguarding, should be outcome focused and working towards the promotion of the adults wellbeing.
Actions to be taken as a result of financial abuse will be reliant upon other existing legal powers as safeguarding duties and functions do not provide any express legal power to take any particular action as a result.
Kent County Council has a sophisticated download on the topic, with lots of broader advice than internal council steps to protect: much of what follows has been taken from there.
www.kent.gov.uk/__data/assets/pdf_file/0004/52969/Financial-abuse-toolkit.pdf
It may be necessary to work with OPG towards unseating a deputy, for instance; or the Police and Criminal Evidence Act (1984), the Courts and Criminal Justice Act (2015) and Domestic Abuse Act (2021), the Fraud Act (2006) and common law powers of the police.
All practitioners working with vulnerable adults need to be equipped to have an understanding and effective analysis of financial coercion/exploitation allegations when a victim is reluctant to engage.
Possible Indicators:
The Guidance para 14.17 also contains the following definition of financial abuse –‘Financial or material abuse including theft, fraud, internet scamming, coercion in relation to an adult’s financial affairs or arrangements, including in connection with wills, property, inheritance or financial transactions, or the misuse or misappropriation of property, possessions or benefits.’
A list commonly found in local authority protocols is as follows:
Sudden inability to pay bills
Sudden debt
Unexplained or unusual patterns of cash withdrawal from an account
Lack of belongings that the adult can clearly afford
Resistance by family to give explanation for unusual financial activity
Extraordinary interest by family in an adult’s assets
Purchase of items that the adult would not usually buy or need
Personal items going missing
The main interest shown by a family member is financial and not the in relation to the care of the adult
Financial abuse is most frequently perpetrated by a person acting in a trusted capacity, for example, a family member or friends and neighbours or care workers / other professionals.
Examples include:
Staff in care establishments exploiting residents by gaining their trust and taking over their finances unlawfully.
Care providers invoicing for services not provided.
Powers of attorney holders exploiting their position by misappropriating funds.
Some families may have a view that the income of individual family members, including benefits for disabled adults, should be pooled into the family income.
The person managing a direct payments account (which can include the client) engaging in false accounting through the forgery of accounting records / payslips, to allow monies to be misappropriated.
Financial abuse more commonly perpetrated by a stranger includes mass marketing fraud, identity theft or rogue trading.
Theft i.e. money or possessions stolen, borrowed or withheld without permission.
Wrongfully controlling access to money or benefits.
Preventing someone buying goods, services or leisure activities.
Money being absorbed into a care home or household budget without the person’s consent.
Being deliberately overcharged for goods or services, or being asked to part with money under false pretences.
Not providing the care (1 to 1 and shared hours) but charging the client.
Carrying out unnecessary work and / or overcharging.
Postal, telephone and internet scams where the person has interacted with someone and has lost money.
Unlicensed money lending (loan sharks) i.e. being offered a loan on very bad terms.
Staff or volunteers borrowing money, or accepting gifts or money from clients.
Misuse of a person’s assets by professionals.
Altering ownership of property without consent.
Exerting undue influence to give away assets.
Pressure in connection with wills, property, inheritance, possessions or benefits.
Putting undue pressure on the person to accept lower-cost / lower quality services in order to preserve more financial resources to be passed to beneficiaries on death.
Misuse of powers of attorney.
Office of the Public Guardian
The Office of the Public Guardian (OPG) protects people in England and Wales who may not have the mental capacity to make certain decisions for themselves, such as about their health and finance.
They support the Public Guardian in carrying out the legal functions of the Mental Capacity Act 2005.
They are responsible for:
– taking action where there are concerns about an attorney or deputy
– registering lasting and enduring powers of attorney, so that people can choose who they want to make decisions for them
– maintaining the public register of deputies and people who have been given lasting and enduring powers of attorney
– supervising deputies appointed by the Court of Protection, and making sure they carry out their work in line with Mental Capacity Act
– looking into reports of abuse against registered attorneys or deputies
Contact the Office of the Public Guardian if you have concerns about an attorney or a deputy, eg the misuse of money or decisions that aren’t in the best interests of the person they’re responsible for. It can be reached on opg.safeguardingunit@publicguardian.gsi.gov.uk
If the abuse is perpetrated by an attorney or deputy and the donor still has capacity, he / she can revoke the Lasting Power of Attorney (LPA) by way of a Deed of Revocation.
The attorney should be alerted and, where the LPA is registered, the Public Guardian informed. Where the donor lacks capacity case managers can refer concerns directly to the Office of the Public Guardian.
A local authority via Client Financial Affairs can make representations to the Office of the Public Guardian if there is reasonable belief that an attorney or deputy is not acting in the person’s best interest.
The Court of Protection
Where the person experiencing financial abuse lacks capacity the Court of Protection has wide powers to deal with the consequences of financial abuse.
These include:
- Making an order prohibiting a named person from having contact with the person experiencing financial abuse.
- Making an order enabling another person to bring proceedings on behalf of the person experiencing financial abuse, for example, for redress in the civil court.
This may involve claims of fraud, coercion, undue influence, lack of capacity, and breach of trust.
– Appointing a deputy.
In addition, the Court can simply set aside gifts or wills on the grounds that the person lacked capacity at the relevant time.
The High Court
The High Court can make: freezing injunctions to prevent money or property being disposed of, and search orders to allow access to the home or workplace of the person alleged responsible to search for documents.
Injunctions can also be obtained to prevent the person alleged responsible from leaving the country. A person acting as a ‘litigation friend’ (ie. representing a person with mental health issues) can also apply to the High Court for recovery of funds.
The criminal courts
If a criminal offence, such as theft or fraud has been committed, the person experiencing financial abuse may wish to press criminal charges against the person alleged responsible. For more information about theft and fraud, see The Theft Act 1968 and The Fraud Act 2006 – both available on www.legislation.gov.uk.
The civil courts
Where a criminal offence has not been committed, it may be possible for the person subjected to financial abuse to obtain relief through the causes of action known as undue influence or duress. Undue influence occurs when a person’s wishes regarding a gift or bequest are overruled as a result of coercion or undue pressure by somebody else. Duress relates to a person entering into an agreement as a result of threats.
Where it is established that duress or undue influence has been exerted, any contract the person experiencing financial abuse has entered into may be set aside and they must take steps to avoid the contract.