Financial abuse

Identify the signs of clients who may be at risk of financial abuse and understand what action to take.

Introduction

Who should read this guidance?

This guidance is aimed at all solicitors who advise clients who are or may be at risk of financial abuse, in particular those conducting private client work involving estate and financial planning, property transactions, execution of wills or lasting powers of attorney (LPAs).

It may also be useful to other professionals working with adults at risk of financial abuse, and to carers, families and friends.

Use of terminology

We acknowledge the common view that the word 'vulnerable' can be perceived as negative and can undermine the fact that the fault for any abuse lies solely with the perpetrator. It is the person’s circumstances that make them vulnerable.

'Vulnerable adults' has been used in this guidance, rather than ‘adults at risk’ or ‘adults with care and support needs’, as the term is commonly used within our society and by judges. It is only intended to refer to people at greater risk of financial abuse.

What is the issue?

The risk of financial abuse is increasing due to economic factors, social isolation, socio-cultural factors and advances in technology.

Solicitors are well placed to identify possible or actual financial abuse. They should consider whether a client’s circumstances might make them vulnerable to the risk of abuse and acting against their own interests whenever they are consulted or instructed by a client in any matter.

Solicitors have a responsibility to be aware of financial abuse and to understand their role in preventing it, identifying it, and taking action on behalf of the client in the event of suspected or actual financial abuse in the course of their practice. This guidance aims to help solicitors with these responsibilities.

The Solicitors Regulation Authority's (SRA) Code of Conduct for Solicitors, RELs and RFLs sets out all of its regulatory requirements. It outlines the ethical and competency standards that the SRA expects of law firms and practitioners.

The Law Society’s guidance on meeting the needs of vulnerable clients sets out factors which increase a client’s vulnerability to abuse, and also covers capacity and undue influence.

Financial abuse covers a wide variety of activities, from mishandling finances to fraud, but may broadly be described as a violation of an individual's rights relating to their financial affairs or assets. 

Section 42(3) of the Care Act 2014 in England and section 197(1) of the Social Services and Well-being (Wales) Act 2014 in Wales define ‘abuse’ as including financial abuse, which covers:

  1. having money or other property stolen
  2. being defrauded
  3. being put under pressure in relation to money or other property; and
  4. having money or other property misused

The English Care and Support Statutory Guidance, which supports the Care Act 2014, cites examples of financial or material abuse as:

“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.”

Chapter 14 of the Care and Support Statutory Guidance to the Care Act 2014 is the English guidance to local authorities on safeguarding.

In Wales, the statutory guidance in relation to Part 7 (Safeguarding) of the Social Services and Well-being (Wales) Act 2014 is contained in volumes 1-6 of Working Together to Safeguard People.

Financial abuse is a form of domestic abuse under the Domestic Abuse Act 2021 (DAA 2021). It is referred to as ‘economic abuse’ and is defined in section 1(4) as ‘any behaviour that has a substantial adverse effect on B’s ability to:

  • (a) acquire, use or maintain money or other property, or
  • (b) obtain goods or services.
The victim of economic abuse under the DAA 2021 must be a person who is ‘personally connected’ to the perpetrator which includes relatives and is widely defined to extend to step-relatives and first cousins.

For cross-border cases, it should be noted that the Scottish legislative regime is different.

Forms of financial abuse

Financial abuse includes but is not limited to:

  • theft – either physically, or through transfer of funds from the vulnerable person
  • misappropriation or misuse of money or property – for example, improper use of money or assets when handling it for a vulnerable person under informal arrangements
  • exerting undue influence to give away assets or gifts – this can include putting inappropriate pressure on a vulnerable person to change their will, or make gifts they otherwise would not, or to sign over the family home to one relative when the vulnerable person is about to go into residential care
  • putting undue pressure on the vulnerable person to accept lower-cost/lower-quality services in order to preserve more financial resources to be passed to beneficiaries when the person dies
  • carrying out unnecessary work and/or overcharging – for example, tradespeople recommending unnecessary repairs to property, pressure-selling of services, overcharging for work or charging in advance
  • misuse of a vulnerable person’s assets by professionals – for example, by accountants or legal professionals with access to client funds
  • misuse of an enduring power of attorney or property and financial affairs LPA – use other than as intended or further than as limited by the document
  • misuse of welfare benefits by those appointed to manage such benefits on behalf of someone lacking capacity
  • misuse by paid carers or family members of local authority direct payments, which should be used to pay for care and support
  • sales representatives encouraging vulnerable people to enter into contracts or change suppliers (for example for mobile phone services) when they do not understand their contractual responsibilities
  • internet and postal scams that fraudulently obtain payments from a vulnerable person
  • identity fraud, where the perpetrator gains access to the vulnerable person’s identification documents and takes out credit cards and loans in their name
  • romance abuse and predatory marriages, where the vulnerable person is ‘groomed’ to have a relationship with the perpetrator who intends to scam the victim out of money, or marry them with the intention of inheriting their estate

Controlling or coercive behaviour, sometimes taking place alongside physical abuse, can take the form of:

  • depriving the person of their basic needs
  • limiting access to finances
  • denying access to support services, such as specialist support or medical services
  • forcing the victim to take part in criminal activity such as shoplifting
  • controlling finances, such as only allowing a person a punitive allowance
  • taking wages, benefits or allowances

See Controlling or coercive behaviour: statutory guidance framework, published by the Home Office pursuant to section 77(1) of the Serious Crime Act 2015.

Adults at risk

Although anyone can be the victim of financial abuse, people with care and support needs, such as those who have a long-term illness or condition, disability or impairment, are particularly at risk. 

Risk factors

The following risk factors have been identified as being associated with elder abuse, but could equally apply to abuse of any adult:

  • poor physical and mental health of the victim
  • dependency on the older person for accommodation, financial and emotional support
  • a long history of poor family relationships – this may worsen as a result of stress when the older person needs more care
  • relatives having limited time for care due to work commitments
  • social isolation because of loss of physical or mental capacity, or through the loss of friends and family members
  • lack of funds to pay for care

Within institutions, abuse is more likely to occur where:

  • standards for health care, welfare services and care facilities are low
  • staff are poorly trained, poorly paid, and overworked
  • the physical environment is deficient
  • policies operate in the interests of the institution rather than the residents 

Further information can be found in A Strategy for Recognising, Preventing and Dealing with the Abuse of Adults at Risk (PDF), Bielanska & Solicitors for the Elderly (June 2019).

You should be alert to clients who are vulnerable to undue influence, undue pressure, coercion or duress and who may not have mental capacity to make decisions and provide you with true instructions.

A person may have capacity to make some decisions but not others, or their capacity may fluctuate over time, so you should assess capacity at the point of instructions and when a decision is being made or a transaction is undertaken by the client.

For more information on identifying clients who may be at risk, and what precautions to take, see our guidance on meeting the needs of vulnerable clients and working with clients who may lack mental capacity.

What to be alert for – known indicators for abusive activity

Financial abuse indicators can include but are not limited to:

Bank accounts and payments

  • signatures on cheques or other documents that do not look like the vulnerable person's signature or are signed when the person is unable to write
  • any sudden changes in bank accounts, including unexplained withdrawals of large sums of money by a person accompanying the vulnerable person
  • the sudden inclusion of additional names, such as a carer or neighbour, on a vulnerable person's bank accounts or benefits payments
  • unexplained withdrawals from a cash machine at a time when the account holder could not have accessed the account

Wills and power of attorney

  • abrupt changes to or creation of wills that leave most or all of the assets to a new friend or only one relative
  • ordinary power of attorney or property and financial affairs LPA being obtained after the vulnerable person has ceased to have mental capacity to manage their own finances and property

Behaviour of relatives or carers

  • the sudden appearance of previously uninvolved relatives claiming their rights to a vulnerable person's affairs and possessions
  • unusual concern or interest shown by family or others in the assets of the vulnerable person and how money is being spent, particularly on the care package
  • unexplained sudden transfers of assets to a family member or someone outside the family
  • numerous small sums of cash being 'given' to, or money regularly disappearing after visits from a relative, carer or neighbour
  • deliberate isolation of a vulnerable person from their friends and family, resulting in the carer alone having total control

Living conditions, bills and personal possessions

  • unpaid bills, such as overdue rent, care home bills or public utilities bills, when someone else is supposed to be paying bills for the vulnerable person
  • change in living conditions, such as lack of heating, clothing or food that the vulnerable person should be able to afford
  • inability to pay bills or unexplained shortage of money
  • the unexplained disappearance of funds or valuables such as art, silverware, jewellery or other personal possessions

Management of finances

  • the person allocated to manage financial affairs being evasive or uncooperative
  • lack of financial records kept by a care home, care service, deputy, attorney or appointee
  • a financial attorney ‘justifying’ the transfer of the donor’s money to themselves, for example as an early payment of their inheritance, to buy expensive items, such as cars, which they say they need to carry out their role, charging for their time without proper authority, or because they say they ‘deserve’ recompense for the sacrifice they are making as an attorney

See A Strategy for Recognising, Preventing and Dealing with the Abuse of Adults at Risk (PDF), Bielanska & Solicitors for the Elderly (June 2019).

Solicitors may be likely to notice some indicators more than others, depending on the nature of their practice (for example, depending on whether they are working on wills, gifts or transfer of assets). However they may also become aware of other concerns during the course of their work for a client.

Mental health, dementia, and autism awareness training and disability equality training can help in identifying situations giving rise to potential abuse.

Solicitors are service providers under equality legislation and have obligations to make reasonable adjustments for clients where necessary. For example, you should use plain English when speaking or writing to a client about measures that would protect them from abuse. This is particularly important for clients who may be vulnerable to financial abuse, including those who may lack capacity to provide instructions for a transaction.

Clients who lack capacity may be at greater risk of abuse; for example, they may not understand the risks and consequences of making a substantial gift of their assets or of transferring their family home into relatives’ names.

If your client does lack capacity, then your role and obligations are different from when the client has capacity.

The Mental Capacity Act 2005 and the common law have established capacity tests which include:

  • make a will (Banks v Goodfellow (1870) LR 5 QB 549)
  • instruct a solicitor to take legal proceedings (Masterman-Lister v Brutton & Co (2002) EWCA Civ 1889: Dunhill v Burgin (No.2) (2014) UKSC 18)
  • make a gift (Re Beaney (1978) 2 All ER 595)
  • make a lasting power of attorney (The Public Guardian v RI & Ors [2022] EWCOP 22)
  • revoke an enduring power of attorney (Re KJP [2016] EWCOP 6)
  • revoke an LPA (SAD and ACD v SED [2017] EWCOP 3)
  • manage property and financial affairs (Masterman Lister v Brutton & Co [2002] EWCA Civ 1889)

For more information and guidance on when, how and by whom a capacity assessment should be undertaken, see our guidance on working with clients who may lack mental capacity.

Undue influence or misuse of power

Sometimes a person appears to have capacity under the Mental Capacity Act 2005 but they are under excessive pressure from others, such as relatives or friends. For example, this can affect someone who has recently experienced a death of a close relative, is in the early stages of dementia, or has a mild learning disability.

In DL v A Local Authority & Ors [2012] EWCA Civ 253 the Court of Appeal used its inherent jurisdiction to protect such vulnerable adults. Since then, the inherent jurisdiction has increasingly been used to protect this group of people. This guidance note on inherent jurisdiction is a useful resource.

What happens when the client lacks capacity

If the client lacks capacity to make a decision, then the best interests principle applies.

Before a best interests decision can be made on behalf of the client you should:

  • not automatically assume what is in the client’s best interests based on their age, appearance, condition or behaviour
  • consider whether the client will regain mental capacity in the future and whether the decision can be postponed until that time
  • consult and involve the client in the decision – ensuring that the client has an independent advocate can help with this
  • take into account the client’s wishes, feeling, beliefs and values
  • consider the views of people the client has asked to be consulted, and carers, people interested in their welfare, their attorney or deputy

Any decision made should be least restrictive of the client’s rights and freedom.

If you determine on your own assessment that it appears the client lacks capacity to instruct you, then you should discuss with your client whether it is necessary to get a formal assessment of capacity from a relevant professional.

Any substantial financial transaction will require Court of Protection involvement if the client lacks capacity (see the sections below on powers of attorney and deputyship).

It is important to work and plan together with a client to prevent financial abuse, for example by taking precautionary measures to protect against financial abuse during periods when the client anticipates they may not be able to make decisions.

Some methods of protecting your clients from financial abuse are covered below.

Powers of attorney

Lasting powers of attorney (LPAs) enable an adult to appoint another person to exercise decision-making powers on their behalf. They continue to be valid after the person loses capacity, unlike an ordinary power of attorney.

It is important that clients understand the risks as well as the benefits of granting these powers. You should advise the client of the potential for their abuse and build in appropriate safeguards, such as including:

  • a supervision clause requiring the attorney to provide financial statements to a third party, for example so an accountant can draft audited accounts or a friend can oversee transactions
  • name people the attorney should consult with on certain decisions, which helps to keep the attorney in check
  • express reference to relevant parts of the Mental Capacity Act 2005, such as the requirement to support and consult the donor and take into account their views and the limited power of attorneys to make gifts under section 12 – this will prompt the attorney to act in accordance with the Mental Capacity Act 2005

You should also give the attorney detailed information, explaining how to make good decisions in the best interest of the client.

Listen carefully to the person who initially makes contact, as it may indicate problems about the balance of power in a relationship. Are they seeking ‘to get a LPA’?

You should take special care if a client arrives with a new friend or long lost or previously estranged relative who they wish to nominate as their financial attorney, particularly when there is a complex portfolio of assets or large assets.

This person may be taking advantage of the client. In this situation you may decide to enquire into the nature of the relationship with the client. Such a decision will be within your professional judgement and may help you determine whether the relationship is genuine or not, and whether the instructions are in the client’s interests.

If you form the view that the client is subject to undue influence, you cannot act under those instructions, even if you believe they have mental capacity.

You should note that a specific capacity test applies to making an LPA. See our guidance on working with clients who may lack mental capacity.

The same principles apply to enduring powers of attorney executed before the implementation of the Mental Capacity Act 2005, as these are still lawful. They should be registered once the donor is beginning to lack capacity to make decisions about their finances.

For further detailed information on LPAs, including the client's capacity to make them, and building in safeguards against abuse, solicitors should see our practice note on lasting powers of attorney.

Gifts

You should make clients aware of the nature of any gift as an outright transfer and not a loan. Explain the risks of any substantial transfers affecting their ability to support themselves independently and their standard of living in the longer term.

Potential beneficiaries of the client's will, such as family members, may have encouraged the client to make a gift in order to avoid taxes or care fees.

As well as advising the client of the risks to their future independence, you should explain that such gifts may not be an effective way to avoid tax or fees. For example, the local authority may treat the gift as a deliberate deprivation of assets for the purpose of avoiding paying care fees, and so charge full fees to the client.

You should also take great care when a client is considering making personal loans, as they can easily fall into the category of gifts if they are not on fully commercial, arm’s length terms.

Take particular care if you are approached by an attorney or deputy to make gifts on behalf of a person who has lost capacity to engage in making a gift or tax planning themselves, as they will need to obtain an order from the Court of Protection if the gift exceeds what is permitted by section 12 of the Mental Capacity Act 2005 or the deputyship order.

For further information see our practice note on making gifts of assets.

The Office of the Public Guardian has also produced a guidance note on making gifts on behalf of an incapacitated person.

Wills

When drafting wills, you should be particularly alert for potential abuse where:

  • the person making the will is not being allowed individual access to you
  • instructions come from a third party
  • instructions come from someone who is to benefit from the will
  • a third party is always present at an interview with the solicitor, or always present immediately before or after the interview
  • the instructions are very different from previous testamentary dispositions
  • a third party is using their own solicitor to prepare a will for a vulnerable person who has previously had their own solicitor

Estate administration

You should always be aware of the potential for abuse where a person wishes to appoint an attorney for the purposes of taking out a grant of probate or letters of administration.

You should also take notice of substantial 'interference' or influence where a third party is becoming involved in the administration of an unconnected person's estate where they do not benefit or have no indirect benefit.

Mis-selling

Some groups at particular risk may lack capacity to enter into contracts, to change suppliers or to understand their contractual responsibilities.

If you suspect your client has been mis-sold a product or service, you may wish to consider approaching the relevant ombudsman. For example, for mis-selling of financial products, you or the client can contact the Financial Ombudsman.

If you suspect that your client is the victim of a loan shark, you should report the situation to the government’s Illegal Money Lending Team at reportaloanshark@stoploansharks.gov.uk in England, or the Wales Illegal Money Lending Unit at imlu@cardiff.gov.uk in Wales. They have broad powers of investigation and restitution.

Language and cultural barriers

You should take great care to correctly identify the relationship between a client and any person accompanying them.

The exact nature of relationships can become confused when interpretation is needed to communicate with the client, or where the client is from a cultural background that identifies such relationships differently (for example, using familial language to describe someone not formally related to the client).

If you're concerned that the client's wishes are not being communicated accurately by someone that they have chosen to translate for them, you should consider whether to engage an independent translator.

It is also important to ensure that contractual terms and consequences are clearly understood by clients from cultural backgrounds that may hold different understandings of contractual and propriety concepts.

If you suspect financial abuse, deciding on the appropriate action will not always be straightforward. This is especially so when taking into account the rules of client confidentiality.

This duty is covered in paragraph 6.3 of the SRA Code of Conduct for Solicitors, RELs and RFLs, which requires that:

“You keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents.”

A similar duty applies to firms (paragraph 6.3 of the SRA Code of Conduct for Firms).

Paragraph 3.1 of the Code of Conduct for Solicitors, RELs and RFLs states:

“You only act for clients on instructions from the client, or from someone properly authorised to provide instructions on their behalf. If you have reason to suspect that the instructions do not represent your client's wishes, you do not act unless you have satisfied yourself that they do. However, in circumstances where you have legal authority to act notwithstanding that it is not possible to obtain or ascertain the instructions of your client, then you are subject to the overriding obligation to protect your client's best interests.”

This means that where your client does not have capacity to make the relevant decision or take the action that they want to take, then your duty of confidentiality has to be weighed against your duty of care to protect the client in their best interests.

Whether you can breach your duty of confidentiality to your client will depend on the likelihood and seriousness of harm which may occur if you take no action.

If you have a reasonable belief that an offence has been committed against your client, if the client has capacity, you should first discuss this with them and support them to decide what they want to do. It is important not to be judgmental as sometimes the client decides not to take action, particularly where the perpetrator is a close family member.

If the client lacks mental capacity to consent, you should follow your firm’s safeguarding policy, which should include notifying the Office of the Public Guardian (OPG) if the concern is about an LPA or deputyship order. Any contact with the OPG will be handled in absolute confidence, unless you otherwise give consent.

Consider whether you should also contact the client’s adult social care safeguarding team and/or the police. The SRA's guidance on confidentiality of client information explains when you can disclose information to safeguard your client.

For advice on the Code of Conduct, solicitors should call the SRA professional ethics helpline on 0370 606 2577.

Solicitors may also find it useful to review the ICO guidance on legitimate interests under the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 and the OPG Safeguarding Policy on sharing information.

The Office of the Public Guardian (OPG) has a statutory responsibility for investigating concerns about the actions of registered attorneys and deputies (or where the court has authorised an action under a single order).

It has an investigations unit with a dedicated phone number which can be found on its website.

Its Safeguarding Policy outlines what it can do if investigating any of the above. (Note that the OPG uses the term ‘adult at risk’ rather than ‘vulnerable adult’, in line with the language used in the Care Act 2014 and the Social Services and Well-being (Wales) Act 2014.)

It could take any of the following actions:

  • apply to the Court of Protection for:
    • the suspension, discharge or replacement of a deputy
    • an order to be varied or for a deputy's security bond to be called in or varied
    • a revocation of a power of attorney
  • inform the police, where a crime may have been committed
  • require a deputy to provide a final report where the person he or she was acting for has died or the deputy has been discharged
  • monitor the situation through ongoing close supervision of the deputy in the case
  • inform external agencies, including any professional body that the perpetrator is a member of, and the Disclosure and Barring Service

As set out under The role of the local authority, local authority adult social services take the lead in coordinating the multi-agency approach to safeguard adults at risk, including with the OPG. The role that the OPG will take in any investigation is decided on a case-by-case basis.

The OPG may:

  • investigate the case itself exercising its statutory powers. In such a case, the OPG may still inform social services and/or the police can still be informed that it has received a report of suspected abuse
  • refer straight to adult social services and/or the police if the OPG does not have the authority to investigate
  • work with other agencies (in particular adult social services) to investigate and deal with an allegation relating to an OPG client

The OPG aims to complete safeguarding investigations within 14 weeks. See its guidance on how it deals with safeguarding concerns.

If the concerns require immediate action, they should be raised both with the OPG and with the relevant local authority as a safeguarding alert (see The role of the local authority below).

People outside the scope of the OPG’s powers

There may be situations where the person subject to abuse lacks capacity but the Public Guardian lacks jurisdiction to intervene as the person does not have an appointed deputy or attorney.

In these circumstances you may want to consider or advise on an application to the Court of Protection. The court has wide powers which may be exercised to protect someone who lacks capacity. This includes powers to:

  • appoint a deputy
  • make declarations of capacity
  • prohibit named persons from contacting someone who lacks capacity
  • make a residency order

An unregistered enduring power of attorney (EPA)

The OPG will normally make a referral to the adult social services department of the local authority of the area where the person lives. If the donor of the EPA lacks capacity to make decisions, the OPG may advise that an application is made to the Court of Protection for revocation of the EPA and the appointment of a deputy.

The court will sometimes order the Public Guardian to provide a report under Section 49 of the Mental Capacity Act 2005 in such cases.

A former receiver or deputy

The OPG will normally advise the current deputy to deal with the matter. Where a deputy has been discharged, or has died, or the vulnerable adult has died, the OPG can call for a final report from the former deputy (or the personal representatives if the deputy has died).

If the Public Guardian is not satisfied, the replacement deputy or the person’s personal representative may apply to the Court of Protection for enforcement of the security bond. This only applies to deaths and discharges after 1 October 2007.

Someone acting under certain types of Court of Protection short orders

Short orders were granted by the Court of Protection before the Mental Capacity Act 2005 came into force in October 2007. The Public Guardian does not have powers to investigate all short order situations. The OPG usually refers the concerns to adult social services for an investigation.

This may result in an application being made to the Court of Protection to revoke the order and, if necessary, a court order to appoint a deputy. The application could include authority to look into the transactions of the person acting under the short order.

Any other person

The OPG will make a referral to adult social services. If the person has an appointed deputy then the OPG will want to be kept informed of the situation. It could contribute to the action by monitoring the situation through supervision of the deputy and visits to the person from a Court of Protection visitor.

Appointees

The OPG will make a referral to the Department for Work and Pensions (DWP) and to adult social care.

Litigation

If any form of litigation is contemplated, and you do not consider that the adult has capacity to instruct you, should consult with family members to see if an appropriate individual is able to act as a litigation friend. For more information see our guidance on meeting the needs of vulnerable clients and working with clients who may lack mental capacity.

If there is no family or no one who does not present a potential conflict of interest with the client, for example if the relative is the suspected abuser, then you should contact the Official Solicitor. The Official Solicitor can be appointed as litigation friend, if proceedings need to be taken, although note that the Official Solicitor will only agree to be appointed if there is security for any legal costs that will be incurred.

Deputyship

If the client has assets that need protecting and lacks capacity to manage their assets, an application should be made to the Court of Protection for a deputy to be appointed.

The court can give wide ranging powers to the deputy to manage the client's bank accounts, sell property, and manage other assets.

If there is a need for a court order appointing a deputy, then if no suitable individual can be found or no relative is willing to act as deputy, or you do not provide such a service, then one option would be to contact the local authority's adult care solicitor to ask whether the local authority deputyship team is willing to act as deputy.

Failing this, an application can be made for a 'panel deputy' to be appointed. A panel deputy is a member of an approved list of deputies (mostly solicitors) with specialist knowledge of the Mental Capacity Act 2005.

A list of panel deputies can be found on the GOV.UK website, and the Court of Protection has access to a panel of deputies who may be called on where there is no-one else willing or able to take on the role of deputy.

If you're applying for a deputy to be appointed, you should also consider whether it is appropriate for an application to be made for a statutory will.

Appointeeship

If a client receives a state pension and/or benefits, an application can be made to the DWP for a suitable person to be appointed as the appointee of the client's benefits if:

  • the client does not have capacity to manage them any longer, or
  • there are concerns that they are being mismanaged

If there is no suitable person, then the local authority may agree to be appointed as appointee of the benefits and pension.

If you have concerns that the benefits are being mismanaged, then you should consider reporting these concerns to the DWP which will investigate whether or not the current appointee is a suitable person to continue to act as appointee.

How to report these concerns will depend upon the benefit the person receives. See the government’s guidance on becoming an appointee for someone claiming benefits.

Find out how to report benefit fraud

The role of the local authority

Local authorities have statutory safeguarding duties in relation to adults in their area at risk of abuse, including financial abuse.

The statutory framework, and the precise criteria for investigation, differs depending upon whether the adult is in England (where the framework is the Care Act 2014) or Wales (where it is the Social Services and Well-being (Wales) Act 2014). However, in both cases, the local authority must either itself or through others make such enquiries as are necessary to decide whether action should be taken, and, if so, by whom.

Each local authority has adult safeguarding officers who may also be known as (vulnerable) adult protection officers, with responsibility to involve multi-agency teams and manage cases referred to them.

The precise scope of the enquiry, who leads it and its nature, and how long it takes, will depend on the particular circumstances. The local authority is then under a duty to decide what – if any – further action is to be taken.

There is detailed statutory guidance applying to local authorities in the discharge of their safeguarding duties for England and Wales. There will be statutory guidance under the Domestic Abuse Act 2021, which sets out local authorities responsibilities for safeguarding and supporting victims of domestic abuse. The draft guidance is currently available.

It is important that the adult's capacity to make relevant decisions, such as decisions to protect themselves against abuse, and capacity to manage their finances and assets, is assessed as soon as possible to determine which legal options are available, such as using the Court of Protection.

Abuse and neglect by legal professionals

If you suspect abuse or neglect by another legal professional, you should contact the SRA professional ethics helpline for guidance.

Criminal offences

Where you suspect an appointee is not using their powers for the benefit of the vulnerable adult then you should notify the DWP.

If you suspect a criminal offence may be taking place, contact your local authority adult safeguarding team or the police, phoning the number 101.

However, the police may ask that no action be taken while they investigate and gather evidence against the perpetrator before the perpetrator realises that the police are investigating.

The difficulty with this approach is that you may have a duty of care to apply for deputyship in the interim to protect the assets from being further dissipated by the perpetrator. If the perpetrator is a deputy or attorney, the OPG will want to launch an investigation.

Generally local authority solicitors will cooperate with the police. You should make clear that they must take interim steps to apply to the Court of Protection if there are sufficient assets to make it worthwhile appointing a deputyship. If not, they must notify the DWP where necessary to stop paying the adult's benefits to the perpetrator as the appointee.

Local authorities may also be able to assist, by considering what protective action might be needed in cases of financial abuse. This action can include applying for interim deputyship orders or a single order.

Law Society

Practice Advice Service

Our Practice Advice Service provides a dedicated support line for Law Society members and employees of law firms.

Practice notes

Making gifts of assets

Lasting powers of attorney 

Other guidance

Meeting the needs of vulnerable clients

Working with clients who may lack mental capacity

Publications

Assessment of Mental Capacity (5th edition)

Elderly Client Handbook (6th edition)

Lasting Powers of Attorney (4th edition)

Solicitors Regulation Authority

Professional Ethics Helpline

Contact the Solicitors Regulation Authority's professional ethics helpline for advice on conduct issues.

Reporting another professional

The SRA provides guidance on reporting misconduct.

SRA Code of Conduct

Code of Conduct for Solicitors, RELs and RFLs

Code of Conduct for Firms

Guidance

Codes of practice

Mental Capacity Act 2005 Code of Practice (under review as at May 2023)

Care and Support Statutory Guidance (Care Act)

Social Services and Wellbeing (Wales) Act 2014 Code of Practice (safeguarding)

Data protection

Information Commissioner guidance on legitimate interests

ICO guidance on data sharing (PDF) (draft for consultation)

OPG Safeguarding Policy on sharing of information, section 22

Third party guidance

A Strategy for Recognising, Preventing and Dealing with the Abuse of Adults at Risk (PDF), Bielanska & Solicitors for the Elderly (June 2019)

Michael Mandelstam, Safeguarding Adults and the Law, Third Edition: An A-Z of Law and Practice (2019, Jessica Kingsley Publishers)

Ann Stanyer, Financial Abuse of Older Clients: Law, Practice and Prevention 2nd Edition (2020, Bloomsbury Professional)

Useful contacts

Office of the Public Guardian

Office of the Public Guardian Investigations Unit

Other groups

Hourglass (formerly Action on Elder Abuse)

Age UK

Financial Ombudsman

Mencap

Mind

Solicitors for the Elderly

Other resources

Financial Abuse of People Lacking Mental Capacity: A Report to the Dawes Trust (2017)

The Law Society acknowledges the Mental Health and Disability Committee and the Wills and Equity Committee for its help in developing this guidance.

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