/ Health, Money

Power cut – the problems with power of attorney

Cable being cut

Power of attorney should make life easier for incapacitated people and their friends or family but, in practice, that’s still not yet happening. When will the story change?

Since last writing about power of attorney (PoA), we’ve again investigated the issue. We hoped to find that providers had responded to our criticisms and amended their ways. Unfortunately, while we found some improvements, there are still ways to go before you can be sure of receiving correct advice and good service.

It appears that far too many bank staff don’t understand some of the key requirements and rights surrounding PoA. Central to this is the tenure that an attorney must be treated as if they were the person they’re acting for. That doesn’t seem like too much to ask, does it? The answer should be a resounding ‘no’. But that’s not what we found.

Power of attorney failings

On several occasions we were told that the person the attorney is acting on behalf of (the donor) needs to participate in the registration process. The whole point of PoA is to relieve the donor of all or some of their responsibilities, perhaps due to mental or physical incapacity, or simply because they no longer feel up to the job of managing their finances. Stipulating that the donor must attend a branch or sign forms isn’t on.

Likewise, restricting access to certain benefits or processes is downright wrong. In our investigation some fieldworkers were told that they couldn’t open or close accounts, use debit cards or bank online.

Today those are all essential requirements, and not only for the sake of convenience (especially with branch closures). Not allowing an attorney to open or close accounts or denying access to online banking could leave a donor’s cash languishing in an inferior account.

‘Shambolic’ treatment?

Our findings echo many of the comments you’ve made in response to our previous power of attorney Convos. For instance, Charlotte told us:

‘There is no excuse for the current deliberately shambolic treatment of people who have abided by the law to help out a friend or relative, often whilst physically exhausted from looking after the care needs of the same person.’

Commenter ‘Glasgow Resident’ has also had a bad experience:

‘Trying to open new accounts to get better interest rates has been really problematic. Branches were unwilling to accept the PoA form and actually asked if I could not just guide my mother’s signature (she cannot write following a stroke).’

The human impact when providers don’t act in accordance with the law on PoA can be frustrating and distressing. It needs addressing, and for this reason we’re meeting with the banking industry and the Office of the Public Guardian (OPG). The OPG is working with the leading banks and building societies to improve policy and practice, with new guidance due to be published.

Let’s hope that the next time we write about PoA here on Which? Conversation, we’ll be talking about the positive change that the joint OPG and banking industry guidance has achieved, and not just more of the same.

mike butcher says:
25 October 2012

Bill I would ask Barclays for any paid cheques and if these confirm fraud then contact the Office of the Public Guardian to see if they are interested

H C Cowen says:
25 October 2012

Santander insisted on registering both attorneys even though we could act separately and I only wanted to close the account. They also alleged the local branch had failed to copy one page of the LPA – they hadn’t. They compensated me with £60. Incidentally, they do not offer third party access as an alternative.

RBS told me incorrectly that I would have to get back to the OPG as an additional item was required; it was not. They also said the branch had missed a page of the LPA; they had not. They paid me £25.

No problems with Halifax.

Julian says:
26 October 2012

Santander doesn’t seem capable of learning from its mistakes, or they are not passing lessons learnt to their branch staff. I had the same issue with them regarding joint attornees, where the donor has stipulated that they can act jointly or independently.

Owen K says:
26 October 2012

I think that it is vital for it to be made clear that with an LPA (Property and Financial), once it is registered, the attorneys can act immediately on the donor’s behalf – for example, take control of their bank account. Since it is impossible to predict how circumstances or relationships might develop over the next ten or twenty years, this seems unwise. However, Section 5: Restrictions and Conditions does allow the donor to stipulate that the LPA can only be used once they have been medically certified to lack mental capacity. This is suggested rather weakly as a possible restriction in the Guidance notes but I think that it deserves much more prominence. I do not intend to complete my LPA until this is fully sorted out – for example, what exactly does ” medically certified” mean?

mike butcher says:
26 October 2012

Owen The answer is not to register the LPA but leave it with someone who will not release it unless they see evidence of loss of capacity.That was always my advice which nearly everyone did .Only a few are ever needed so why register ? Waste of time and money but I know many lawyers advise this cos it increases their charges!

Julian says:
27 October 2012

Sorry to disagree with you once more Mike, but there is the risk that when the time comes to register the LPA, the OPG will reject it on technicality, and if by that time there is evidence of loss of capacity its then too late to re-write the LPA. Best to get the LPA registered asap; if relationships change, then the donor can always cancel it.
POA is not always about loss of capacity of the donor. The donor may just want someone to look after some of their affairs because at some point he or she no longer feel up to it, and is happy to entrust the responsibility to someone close.

Owen K says:
27 October 2012

Mike, I think that I will go with your suggestion. Taking up Julian’s point, a halfway position which others I know have adopted before the donor is deemed unfit is to simplify all of the donor’s banking and investments and put them in the joint names of the donor and the attorney who holds the LPA to register on reaching full incapacity.

mike butcher says:
27 October 2012

Julian If the PoA ismade professionally then there s/b no risk.LPAs are straightfoward just long winded.I made 1000s of EPAs andLPAs and none of 100s of registrations were rejected .I believe it can cost about £500 to register and if 90% are never used thats a lot of money wasted

mike butcher says:
27 October 2012

Owen Joint names is a good idea for accounts which can be operated on either signature and there is total trust.May not help for investments or property where both need to sign

Julian says:
27 October 2012

Owen, simplifying a donor’s investments would not always be the right thing to do, the portfolio may be complex in order to reduce risk and increase returns.
Putting investments into joint names is not possible for certain types of investments and accounts e.g, ISAs. Wouldn’t there also be potential tax issues? This wouldn’t be a substitute either for poa’s where the donor wants to have the safeguard of joint attorneys.

Julian says:
27 October 2012

Would changes accounts to joint be regarded as a gift by HMRC?

mike butcher says:
28 October 2012

Julian I agree that otherthan bank accounts joint names has drawbacks.It can be made clear that the attorney is acting as bare trustee for the donor as sole beneficial owner but that could be challenged.On the other hand inheritance would be easier if the donor wants the attorney to have funds immediately

Keith says:
1 November 2012

My parents had signed the old Enduring Powers of Attorney. When my mother had a stroke and my father was physically no longer able to deal with financial matters, though both were mentally still capable, they asked us (my sister and I) to use the EPOA. We started the process, having to explain repeatedly that the EPOA was not registered with the court. We had certified copies from a bank and a solicitor. Our experiences were very varied – some went through easily (NatWest and Nationwide were very good), others asked for more details and one said that we needed to send the original deed and required my mother’s signature as an original Attorney for my father, even though they had been officially informed that she had died. Things did work but we didn’t always feel to be in control.

Ron Bates says:
1 November 2012

In February 2007 I obtained Power of Attorney for my late mother’s affairs.
I had no problems with her bank (HSBC) I rang for an appointment took in my ID and the attorney document.and left with a joint account about 15 minutes later.
I did have problems with Dept. of Work and Pensions.I phoned the office dealing with her State Pension,I told them I did not like the idea of post the document to three different offices. I was told I could take them to our Job Centre and have certified copies taken. when I went to the Job Centre I was told they did not do it. I tried to explain but he was not interested I then said I was not going until they did the copies. Next thing the bouncer was breathing down my neck asking me to leave I said if he touched me I would inform the Police. On hearing what was going on the Manager came out. She asked me what the problem was, I told, her she took the copies, I signed a form and left.
The only other problems I had were after my mother’s death. People,companies,and organisations who should know better were hounding me and I also had threat of court action for money owed. I just told them to contact mother’s solicitors.
I hope my experiences with Power of Attorney will be of some use to others especially do not take no for an answer.

Kindest regards
Ron Bates

Julian says:
3 November 2012

Following on from Bob’s comments. Over the 2+ years I’ve been actively using LPOA, I’ve never understood why some banks, but not all, require that the POA be re-registered when a new account is required for the donor. Once you have proven that you can legitimately act for the donor, why does this process have to be repeated? I suspect this may be due to their out-dated and inflexible computer systems that are only capable of recording POA at the ‘account level’.

In Santander’s case its certainly the case that they had to make an association between the new account and the existance of a previously registered POA. I can accept this but I do not understand why a 10 minute job in a small local branch office is easily done but the same job is not feasible when you telephone the call centre.

Tony says:
5 November 2012

Having recently taken on a LPA for my Aunt, the ‘Power Cut’ article in this month’s magazine was of particular interest.
As my involvement with HSBC echoes the same problems as reported – the denial of a debit card and online access – I have forwarded a letter to their Customer Information Services asking for clarification.

My Aunt, now approaching her 105th birthday, is registered as blind, reliant on a wheel chair, and virtually housebound in residential care. Although more than happy to shoulder the responsibility of managing her affairs, the logistics of living fifty miles from the nursing home create a number of problems.

Despite the many downsides to my Aunt’s health her mind has not suffered, but her increasing frailty is such that she is no longer able to make telephone calls or to sign cheques, and therefore relies on me to purchase the majority of her additional needs.
Being denied the use of an HBSC debit card means that the purchase of her requisites has to be achieved via my own credit or debit card. The reality of reimbursement is having to write cheques in favour of me; a practice which I would rather avoid.
At the time of registering the LAP the representative at HBSC stated that the bank did not favour such actions [although admitting to times of unavoidability]. The issue of a debit card would ensure that all purchases were recorded directly to my Aunt’s account and make transactions far more transparent.

In addition, not only would I be able to purchase online and have any item sent direct to the nursing home, but also the need to traipse to a bank with a reimbursement cheque would be eliminated.
As for the managing of her accounts it is almost prehistoric, as without online access I have to await the arrival of statements by mail.

In the majority of cases the registering of the LPA with other institutions has been relatively easy, but in cases such as with Santander, the required additional documentation has not proved straightforward.
Apart from the certified copy of the LPA, Santander asked for a copy of my passport or driving licence, plus a copy of a recent bank statement or utility bill. Of the latter two items I elected the utility bill, but a downloaded version was not acceptable and a copy of a paper bill was stipulated.

My banking and utility involvement is all managed on line and is therefore paperless. To comply with the request involved telephoning British Gas, who I found more than helpful. It was necessary for them to close my online account, reinstate postal billing, arrange the forwarding of the statement, and then resurrect the online facility. This was all done in a single phone call and I was impressed.

The decline of paper billing continues and I would hope in time to come that downloaded copies of documentation will become acceptable. I am not au fait with the law, but as it appears acceptable for millions to rely on online invoices as evidence of purchase, why cannot a downloaded copy of a utility bill etc. be accepted as a legitimate form of proof?

Anthony Mallett

Jeanne from Wirral says:
7 November 2012

I have found Barclays Wealth and Santander to both be very difficult and frustrating to deal with with an enduring POA for my Uncle. I also think the time it takes to register a POA through the Court of Protection also adds to the problems. Originally we opened a current account with Santander for my Uncle who is in a home and suffers from Dementia. Whilst waiting for Court approval this was opened by my Uncle signing the forms to open the account. We were given a debit card for his son who he lives near to use to access money for my uncles day to day living expenses and arrangements made so I could manage the account on line. When the POA was registered they made a note and nothing happened.
Recently I opened a branch saver and had to present all the documents again to do this. I then received a letter to day that they had cancelled the debit card as my uncle was incapable of using it!!!!!

My Uncle had an investment with Barclays Wealth in Jersey. It matured in October of this year and I asked for the investment to be closed and not rolled over to a new bond and the money paid into another bank account. They followed the first instruction but told me that Jersey does not have a POA but can recognise foreign POA’s provided they go through the Jersey Court which is yet more expense. They also requested that I provide they with a substantial amount of information to prove who I am in addition to the POA, passport, driving licence and evidence of where I lived which I had already sent them – all of which had been certified by my local branch of Barclays. Interestingly they would not accept details of a Barclays account as suitable evidence!!!

It begs the question that if they can recognise my authority not to roll the money over to a new bond why they cant recognise and transfer the money to the account I requested?

mike butcher says:
7 November 2012

Jeanne Barclays were one of the first to be difficult about EPAs and any connection with the CIs is at risk of involvement in their legal systems cos they are not part of the UK.Same with the IOM.Investors are not usally aware or told of this and it makes it expensive if as on death you have to go through their court to access funds

Gwyn says:
9 November 2012

The article is potentially confusing, in that there is almost no differentiation made between an Enduring PoA and Lasting PoA. I have en EPA for my mother, which has not been registered with the OPG, and have so far been able to exercise it as expected. It’s a bureaucratic pain, but seems to work.

Contrary to the article, I’ve been able to manage her HSBC accounts online, even though she still is able to sign her cheques when necessary, and has her statements sent to her.

The comments have made fascinating, albeit depressing, reading and I agree that this is a minefield –

My siblings and I are joint (3) POA’s under an EPOA which is registered with the COP. Apart from having to prove our identity as part of the anti money laundering regulations we had no problem getting our names on the accounts and investments when we sent a solicitor’s certified copy of the registered EPOA – however, this took us over 12 months to complete and I felt as if we had taken on a full time job.

Our issues are many – We couldn’t have a cheque book as the building society could not cope with 3 signatories! The first we knew that the EPOA was accepted by the bank was when it bounced a cheque signed by mum!

My mother (now diagnosed with dementure, a victim of fraud, scams and at any moment vulnerable to fall victim to this again) until recently still had a cash card, we heaved a sigh of relief when she finally lost it only to find that the bank will now let her simply turn up and withdraw cash – recently this has increased to £500 a time making us suspect that she may again be the victim of fraudsters.

When a cash withdrawal of almost £2000 occurred (subsequently proved to be the bank’s error – no apology received!) we were told that we could not put an immediate freeze on any cash withdrawals from the account leaving it wide open for anyone to take mum to the bank and clean her out.

On the other hand, as joint POA’s we are unable to withdraw cash for her everyday needs (she wont buy food) unless the 3 of us are present at the same time (and of course we live in 3 different areas of the country, none of which is close to mum’s bank!!) we have no cash point card, cant do on line banking and all have to sign the cheques – most of which have had to be made out to one of us to refund money we have personally paid out on doing shopping, giving neighbours funds to shop etc.

We have decided now that as there is no control over mum’s cash withdrawals and she doesnt know what she is doing we have no alternative but to go through the hassle of trying to open a new account and then try to get all the direct debits and credits changed – the thought is draining, the time it will take is daunting and the impact on the lives of my siblings and I and more importantly our family life is immeasurable not to even begin to count the financial cost this all has in terms of petrol, time off work, phone calls etc.

Surely the bank owes some duty of care to us as POA’s too?

My advise to anyone asked to act as a POA is DONT, it is not even a labour of love as the lady bears no resemblance to the mother I once had.

You have my sympathies. I think that any bank needs to strike a balance between the right of the individual and the right of the person(s) having POA, but cannot ignore the reasons why the POA was granted in the first place.

My relative granted me POA because for several reasons. Firstly she was physically incapable of getting to banks without significant problems, second she was not confident about handling her financial affairs (security questions, forms) and thirdly she really did not want the hassle of trying to do these things. At the time she was (and still is) competent to make decisions so I think its only fair that a bank listens to her instructions if she chooses to give any.But in future I may have other difficulties as you have.

The situation you describe where seemingly irrational decisions are being made by the donor which the POA considers unwise is indeed a difficult problem.I am not clear whetehr you chose to register the EPOA because of her mental incapacity or in anticipation of it being a possible problem.

I cannot see how a bank can absolve themselves from its duty of care when they know a POA exists and that it is registered with the CoP. Have you tried writing to the bank (all three POA) and expressing your concern that by acting as they are, the bank is in danger of failing in their duty of care to their customer who may be using money unwisely or under the pressure of third parties? Ultimately, if the bank does not agree that mental incapacity exists you may need to approach the COP, but a formal letter may make them ask whether they are meeting their legal obligations.

mike butcher says:
11 November 2012

Liz Your problems show that there are good reasons to have a joint and several power not just joint.

Thanks Mike and Bob –

Mike – I agree that a joint and several POA would have been good and we still have no idea whether mum was advised by her solicitor to do a joint one or chose to – when we needed to register we were just glad there was an EPOA in existence as I think it unlikely my mother would have agreed to draw up any new POA given her mental state.

Bob – In comparison to our situation your aunt sounds a rational and reasonable lady!. – We took legal advice before we registered the EPOA. Briefly – It became obvious that mum was not well but refused to go to the doctor, her IFA tipped me off about large disinvestments he was concerned about, we then discovered quite by accident that huge sums of cash had gone missing, there was evidence of horrific sums being spent on scams (you may have seen Panorama/Watchdog etc) the Serious Fraud Office had been involved, a builder was ‘helping’ and this previously well organised lady had not dealt with tax etc etc. Whilst anyone should be free to spend their money as they want this was entirely out of charcter and mum was ‘spending’ at a rate that would have quickly made her homeless and destitute. Subsequently the medical diagnosis confirmed our fear and mum’s mental incapacity is now obvious to all who know her – except the bank staff!

Thanks for your advice – we will be writing to the bank as you suggest. The measure of the impact of this on one’s ability to think rationally is that your very simple suggestion never occurred to me! Thank you

mike butcher says:
11 November 2012

It would be interesting to know how many appointed as attornies have made a power of their own.I once asked a doctor who attended my mother in law when she was diagnosed with Alzheimers if he had done so and it had never occured to him.

My mother has been moved into permanent care.I have P of A. I rang British Gas to change the bank details so I pay and receive all bills whilst I sell my mothers property. British Gas were really helpful and also changed the details for the gas maintenance at the same time.
Next was on my list was npower. The girl disappeared off the phone to check whether she could change the bank details.Yes, she could change the bank details but no she couldn’t do an address change. I would need to send in a copy of P of A before they would send billing paperwork to me.It’s currently being redirected by Royal Mail.The reason given was that I might want to discuss energy consumption at my mothers house and without a copy of P of A they couldn’t do this!!!
I would love to meet the ‘jobsworth’ who thought that one up. Other companies, so far, have been really helpful—a pity npower couldn’t be the same.

Alan says:
12 April 2013

n-power are appalling. My father has severe dementia. They just don’t seem to understand that if he could do things for himself he wouldn’t need me as an attorney to do them for him. Every time I have tried to sort something out they have given me new instructions. Every time I followed them I was then told I had to do something else instead. The Post Office were nearly as bad. Nationwide were excellent.