Why is it that banks don’t always make it easy to register and then use a power of attorney, which is usually done during a time of emotional stress? What power of attorney problems have you had?
Our latest investigation into the way banks treat you when you have power of attorney over someone else’s financial affairs, reveals that they’re still putting obstacles in the attorney’s way.
Setting up a lasting power of attorney is a good thing for everyone of a ‘certain age’ to have on their radar. Knowing it is in place gives peace of mind to you (the donor) and your nominated attorneys (so often your children). It will also potentially save your attorneys a whole lot of hassle, time and money if it is left too late: you can only arrange your own power of attorney if you have sufficient mental capacity to understand and direct your own financial affairs.
Yes, it’s not easy to contemplate a time when we might not be in this position, but it is more straightforward to set up your own power of attorney, than to do it on behalf of someone else.
Power of attorney restrictions
So far so good, but our research has found that the real problems start once the power of attorney is set up. This is mainly due to the fact that there’s no consistency over the ways an attorney can control the donor’s account. Which? member Rosanne told us:
‘Despite having power of attorney, I’ve found the majority of institutions suspicious and unhelpful. There seems no recognition of the hurdles you have to negotiate.’
Her words are echoed by many others who have used power of attorney. Bank restrictions caused difficulties for a number of Which? members we’ve heard from, with lack of online access high up the list. Here’s Which? Convo’s Alison:
‘My sister and I have joint and several POA for our mother living at home with dementia (dad died last year). Worst recently was a scary letter sent directly to 90-year-old mum saying there was a problem with her a/c and she should go to bank with her passport etc. We think this was in response to our simple little request for online banking. AAAAAAAH!
‘Dementia is challenging enough without the banks actually causing more grief both to their loyal but now vulnerable customer and their shredded carers.’
Borrowing on a power of attorney is another tricky issue, as very few banks permit a credit card, and using an overdraft facility is restricted by many too.
Power of attorney – not all bad
On the plus side we found that applying for a new Isa in the name of a donor is allowed by all the banks that we surveyed, as is opening new savings accounts. At least the donor then won’t miss out on tax-free interest or the best rates.
The message that has come out strongly from our investigation is to check the different banks to establish just what access they will offer attorneys. The most important and useful points to check are online access and the possibility of having a debit card. If your donor’s bank won’t offer these, you might consider moving the account to one that does.