/ Health, Money

The power struggle with using power of attorney

Struggle with power of attorney

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.

Comments
Profile photo of VynorHill
Member

Our bank arranged an interview and set up the power of attorney. Both my sister and I now operate the account as if it were our own, with out any problem. Full marks. The second account, with another bank was a complete contrast. They were unwilling to set up any power of attorney and insisted that if we were to have access to this account we had to submit a request in writing every time we made a transaction. This account was closed with a letter purporting to come from my parent.

Profile photo of Patrick Taylor
Member

Could you provide the bank names ?

I am very concious that the Bankers trade body is pushing a document that shows thousands of 80+ year olds are signing up for on-line services.

Perhaps this a convenient way for them to absolve themselves from the attorney relationship. I mention this as Banks are required to keep an eye on accounts where they are aware of potential undue influence or where a customer is elderly. You will appreciate that if everything is done electronically they can hardly be “put on notice”.

It is the Banks interest to close branches and reduce administration costs as far as possible and we as customers are incredibly weak in resisting the erosion of the practices that arose under Banking Law that helped protect customers.

The problem is due to get worse rapidly as next year two totally on-line banks are due to launch in the UK togther with one totally on-line interest offering deposit-taker.

They will be able to offer fine rates as they will have minimal infrastructure costs. It will be easy to be a Best Buy if you do not provide a full service.

It is notable here that Which? tell of us of a current problem – without naming names of the problem banks .

I am very concerned that the onus of running an account is being pushed totally to the public and this bears particularly hard on the elderly who tend to be more trusting and stand a reasonable chance of becoming vague and unable to adequately run accounts.

We have to provide the framework of what will be acceptable as leaving it to the Banks is a recipe for disaster and much stress to the elderly and their families.

Profile photo of VynorHill
Member

Sorry, no. I’m more content to talk in general terms when I stick my head over the parapet! Our solicitor had completed all the paperwork in happier days when everyone knew what they were signing. In the first instance this was willingly accepted when the time came to begin “helping out” about four years ago.

Member
Lessismore says:
3 February 2015

We found that the Bank did not know what documents we should have – they said that what we had was wrong. We had the right stuff. They just didn’t have the knowledge.

Profile photo of Patrick Taylor
Member

Unfortunate experience but probably not untypical given what the FOS says about 40 complaints a month it receives.

Profile photo of John Ward
Member

I suspect that because the most experienced and competent echelons of retail banking management and administration were shredded in the early years of this century, the average branch does not have much expertise in these matters. They probably have access on their bank’s intranet to rules, templates and scripts but staff might not be trained in using them, or they might be unsure [and rightly cautious] about personally executing the policies and practices correctly. Unfortunately, the generation that is having to grapple with POA’s is getting on itself and needs to be treated with a bit more support and respect than is commonplace in banks nowadays.

Profile photo of bridge_coach
Member

I hold POA for my son. He had 2 savings accounts with Leeds Building society, which have just been “simplified” to reduce the interest rate from 3.05%pa to 0.5%.
Leeds B/S obviously does not realise that POA does not confer ownership to the attorney, as when I requested closure of the accounts (to their Head Office), instead of issuing cheques payable to my son, Leeds issued cheques payable to BOTH of us.
Fortunately, we do have one old joint account, so I was able to deposit the cheques there; however, I now have to wait for the cheques to clear and as I do not have a cheque book on that account, I will have to go into the branch in order to get a cheque from them to pay into my son’s account.
This means not only inconvenience for me but a week’s lost interest at 2.4% on £10,000 for my son.
I’ll complain to Leeds but don’t hold your breath about getting a reply.

Profile photo of Patrick Taylor
Member

I will not hold my breathe but look forward to the up-date.

Member
sean says:
23 April 2015

Interesting that banks have been doing these kinds of things when power of attorney has been set up. Is there any particular reason for this? It seems, that depending on the way that the POA has been set up, they couldn’t necessarily take advantage of the person without the attorney.