Action needed on elder financial abuse reform

The Australian Bankers’ Association has called on the Federal Government to act now on financial abuse against the elderly and resolve three key issues by Christmas.

 

Financial abuse against elderly Australians is a significant problem, with the Seniors Rights Service estimating 40 per cent of elder abuse cases relate to financial exploitation.

 

In a speech delivered to the 5th National Elder Abuse Conference today, ABA CEO Anna Bligh said that three key decisions need to be made by the Federal Government to implement meaningful reform and empower banks to help address the issue of elderly financial abuse.

 

“There are far too many heartbreaking stories of elderly, vulnerable Australians who have been financially exploited by family members or close friends,” Ms Bligh said.

 

“Bank staff are on the frontline of this issue and see firsthand the financial abuse against the elderly, however are often hamstrung to confront the issue.

 

“Banks are determined to play their part and are asking for key changes to the law to empower their staff to make good faith reports of financial abuse against the elderly,” she said.

 

The following changes were recommended by the Australian Law Reform Commission in 2017 and would make a big difference:

  • Legal changes to help bank employees safely report suspected financial abuse to a designated body
  • A national register of power of attorney orders
  • A standardisation of power of attorney legislation.

 

Currently there is nowhere for bank staff to report suspected cases of financial abuse.

 

Police generally require the customer to make a complaint and current state trustees and public advocacy offices often require the bank to make a formal application and provide detailed information about the customer, for example their medical history. This is not an appropriate role for the bank. Australia needs an appropriate designated organisation where bank staff can report the suspected financial abuse for investigation.

 

“Bank staff are not qualified to make assessments about a customer’s competency and are limited by legal and confidentiality obligations, therefore it’s important they have an appropriate body to flag suspected abuse for investigation,” Ms Bligh said.

 

“Also, Federal and State Governments need to address the inconsistency in the power of attorney legislation which is making it over complicated for employees to detect and report abuse.

 

“From state to state there are differences between formal substitute decision making legislation, which can limit banks’ ability to detect and report financial abuse of customers.

 

“In most states such as NSW, Queensland and Victoria, powers of attorney are not required to be registered formally, making it hard for banks to check the legitimacy of a power of attorney.

 

“If there was a national register with consistent laws across the country it would help banks – and indeed other financial institutions – to verify the authority of a power of attorney or court-appointed administrator when they present themselves as acting on behalf of a customer,” she said.

 

The challenges banks have in reporting suspected financial abuse were highlighted by the Australian Law Reform Commission in its 2017 report to the Federal Government, “Elder Abuse - A National Legal Response”.

 

The ALRC recommended the establishment of an agency to investigate suspected financial abuse and a national register of power of attorneys, both of which will require the support of the Australian Government and all State and Territory Governments.

There are differences between formal substitute decision making legislation in the various states and territories in Australia:

 

Power of attorney (general or enduring)

Registration of enduring power of attorney

Recognition of enduring power of attorney made elsewhere in Australia

Australian Capital Territory

Enduring power of attorney can also be set up to make lifestyle and/or medical decisions

Not required

Recognised

New South Wales

Limited to financial and legal decisions

Not required

Recognised

Northern Territory

Limited to financial and legal decisions

Must be recognised before they can carry out their duties

Recognised

Queensland

Enduring power of attorney can also be set up to make lifestyle and/or medical decisions

Not required

Recognised

South Australia

Limited to financial and legal decisions

Not required

Recognised

Tasmania

Limited to financial and legal decisions

Must be recognised before they can carry out their duties

Recognised

Victoria

Power of attorney can be set up for either financial and/or personal matters.

Not required

Recognised

Western Australia

Limited to financial and legal decisions

Not required

Recognised

 

A power of attorney is a legal document that gives someone the right to make financial and/or legal decisions on behalf of another person.

 

A general power of attorney operates for a particular period of time or for a particular purpose. This is useful if a person wants to put a temporary formal arrangement for a specific purpose in place, or an arrangement for a defined period of time.

 

An enduring power of attorney is designed to commence once the attorney has accepted his/her appointment or at a later time specified. Unlike a general power of attorney, this type of authority remains valid even when the person may no longer be capable of making their own decisions.

 

Guardianship involves making personal, medical and lifestyle decisions. A court or tribunal authorises a guardian to make decisions about a person’s work, living arrangements or medical care and treatment.

20 February 2018.