Complaints about Power of Attorney are rising, according to the Financial Ombudsman Service (FOS).
The FOS said it is now seeing an average of 30 to 40 new cases of Power of Attorney problems a month.
However, many of these issues could be avoided according to the FOS. As a result it is now issuing new advice for bank staff, donors registering for Power of Attorney and their appointed representatives on how to handle problems in future.
What is a Power of Attorney?
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.
There are three types of Power of Attorney; Lasting Power of Attorney (LPA), Enduring Power of Attorney and Ordinary Power of Attorney (OPA).
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. There are two types of LPA in England and Wales; one for property and financial affairs and one for health and welfare. The LPA document must be arranged and attorney (or attorneys if you choose more than one) appointed while you are of sound mind so you can set out what powers they will have. Most of the complaints the FOS sees relate to LPA.
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 (though the OPG only covers England and Wales) if the donor is losing mental capacity. The EPA only covers property and finances.
The OPA allows someone you trust to manage your finances when you are of sound mind and capable of making decisions. This type of Power of Attorney might be suitable for someone going away for a long time like a member of the armed forces. However, if a person loses mental capacity the OPA is no longer valid. It's also important to note that the Office of the Public Guardian has no authority over OPAs, and OPAs do not need to be registered with them.
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.
As you can see the rules and regulations around Power of Attorney can get very complicated and make a distressing time even worse if not handled properly.
Tips for avoiding problems
Most of the complaints the FOS and OPG receives involving Power of Attorney problems are as a result of delays, lost documents and incorrect/missing information on computer systems at the donor's bank or building society.
The FOS says there are few simple steps you can follow when dealing with these firms to avoid these issues.
- When registering a Power of Attorney at the bank, book an appointment to speak to a member of staff and ask what documents you need to bring in.
- Tell the bank anything they might need to know that will make it easier for them to help you. If you're concerned about the mental capacity of the person you are acting for, it makes sense to let them know.
- Explain if there are any financial matters that might mean you need to get Power of Attorney processed urgently. Though the bank can’t skip steps, they may be able to help.
- Keep all original copies of your documents. If staff challenge you, ask them to contact their staff helpline or a manager.
- Once registered, the person granted Power of Attorney should ask where the information is on the bank’s computer system. This is useful to know if staff unfamiliar with Power of Attorney struggle to locate this information.
- Keep a photocopy or scan of the Power of Attorney handy in case you need to present it again when handling a donor's affairs.
- If you find you’re hitting a brick wall, ask if you can speak to the manager or call the Office of the Public Guardian on 0300 456 0300. They can explain to you and the bank what they should be doing.
Places to turn for help
Some Power of Attorney problems won’t be so simple to sort out.
Things can get messy when there is a dispute over the behaviour of the attorney from other friends or family members, or the donor deteriorates but the bank still takes instructions from them as they are entitled to until they are declared mentally incapable.
In these cases the Financial Ombudsman Service and Office of the Public Guardian are there to help.
You can complain to the FOS if you think a bank or building society has not handled your registration or role as Power of Attorney well and they have failed to resolve your complaint.
The Office of the Public Guardian (OPG) is the body responsible for registering LPAs and EPAs in England and Wales, maintaining the Register of registered instruments (the forms) and dealing with complaints about the conduct of attorneys. You can contact the OPG in England and Wales on 0300 456 0300. If you live in Scotland you'll need to contact the Office of the Public Guardian (Scotland) and those in Northern Ireland need to contact the Office of Care and Protection.
Sometimes, the donor’s mental capacity can deteriorate so much that it may be appropriate for the Court of Protection to appoint a deputy to permanently handle their affairs if there isn’t a lasting Power of Attorney in place.