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Fraud and LPA'S

Hopefully when new legislation comes into force, it will be harder for criminals to take out Lasting Power of Attorney without a persons knowledge. One sure way of preventing this is to get a Lasting Power of Attorney registered first. The article below is from the Guardian and makes for uneasy reading.

Fraudsters are using power-of-attorney rules to steal people’s homes This article is more than 1 year old

Lawyers warn that a scammer could use falsified names and addresses to get legal document entitling them to take over the affairs of an another

Jon Ungoed-ThomasSun 26 Dec 2021 09.15 GMT

The system for taking control of a person’s financial affairs is “wide open” to fraud, an investigation has found. It revealed that the application process for obtaining the document known as lasting power of attorney (LPA) has no routine identity checks or effective fraud controls. Labour said it was a “national scandal” and called for an urgent inquiry. The scheme is intended to help manage the affairs of those who are vulnerable or seriously ill. The stamped paper documents can be checked by organisations such as banks and investment firms against a national register. But lawyers warned that a fraudster could submit a “complete work of fiction” to the government body overseeing the scheme, with falsified names and addresses, and be handed the legal document entitling them to take over the affairs of the victim. An investigation by the BBC Radio 4 consumer programme You and Yours has spoken to one victim whose empty home was targeted by a fraudster or fraudsters who obtained an LPA without any proper checks. The fraudsters briefly visited the woman’s flat to drill out the locks and then tried to sell it using the document. This weekend, Steve Reed, the shadow justice secretary, called for an inquiry into the scheme, which is overseen by the government agency the Office of the Public Guardian. He has also written to Dominic Raab, the secretary of state for justice, urging action. Steve Reed , the shadow justice secretary. Photograph: Graeme Robertson/the Guardian He said: “Every single one of us should be worried sick about the immense risks involved in this. It is a national scandal.” The lasting power of attorney was introduced in 2007, but its operation is based on decades of case law. A document can give the holder access to a person’s bank accounts, investments and savings, but there are no routine fraud or identity checks. It can also be used to sell a house. There are estimated to be about 3m such documents in the official registry. It can take up to 40 days for an application for a Lasting Power of Attorney to be registered, and it costs £82. In the case identified by You and Yours, the fraudster successfully obtained the LPA using falsified names and addresses. The victim’s signature was forged, and the date of birth for the victim was incorrect. The fraud was foiled when lawyers who had been approached to handle the flat sale asked for a doctor’s note confirming that the victim was not well enough to deal with the matter. The victim was then informed last June that a suspected fraudster had tried to sell her home, using the official LPA document and claiming to be a sister. The victim is an only child. The fraudster is believed to have targeted the victim’s home because it was empty while she was away to look after her mother. When the victim complained to the Office of the Public Guardian, she was shocked to be advised on at least two separate occasions by the government agency that the fastest way to resolve the matter would be to say that she had allowed the fraudster to take over her financial affairs, and then to ask for the lasting power of attorney to be revoked. Shari Vahl, a reporter for You and Yours, said that the lasting power of attorney system was “wide open” to fraud. She said: “This is probably the most powerful document in anyone’s financial life. Once someone has this document, they have control of your money. And they are being given out without any checks.” The investigation established that a person with the same name as the fraudster had made various applications to local councils, asking for the addresses of known empty properties. It suggests that other properties may be at risk from a similar fraud. Samantha Hamilton, who heads the Court of Protection team at the legal firm Mullis and Peake, said that routine identity checks should be required for such a powerful document. She said: “You could put in a complete work of fiction at the moment and still have the document registered.” The annual report of the Office of the Public Guardian for 2020-21 warns of the risk that the “weakness in the current process allows the registration of a fraudulent [lasting power of attorney].” It says less than 0.1% of registrations are suspected to be fraudulent. There were more than 680,000 successful LPA applications in 2020-21. Officials say that the current scheme requires documents to be signed by witnesses, and that when the agency becomes aware of fraud, it informs the police and cancels the LPA. It says that the advice given to the victim in the You and Yours case was given in error and that the staff involved have been retrained. An Office of the Public Guardian spokesperson said: “Abuse of lasting power of attorney is extremely rare but we intend to introduce more safeguards against fraud and misuse.” The Ministry of Justice has recently completed a consultation on proposals to modernise LPAs aimed at making the system more secure. This includes proposals for better identity checks. The You and Yours investigation is on Radio 4 on 27 December at 12.18pm and will also be available on BBC Sounds.

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