Fraudsters in the family are abusing their intimate knowledge and close connections to steal from partners and parents – according to Hitesh Patel, UK Forensic Partner at KPMG. A report by the audit, tax and advisory company has revealed that people are living longer and consequently family members are choosing to remove uncertainties about when or if they will get their inheritance by fraudulent means.
Fraud in the family is more common than you might think – particularly where elderly relatives are concerned. Statistics released by the Health and Social Care Information Centre reveal that of the 21,935 reports of financial abuse against the elderly made last year, two-thirds involved accusations against friends and family. Investigating these incidents and gathering evidence is difficult, often resulting in the break down of arrangements made with the elderly relative.
KPMG estimate that £1.7 million was stolen from elderly relatives by younger members of their family during the first half of 2015 alone. KPMG’s figures revealed that the most common perpetrator of fraud within the family was the baby boomer who, perhaps frustrated by the increasingly common wait to receive their inheritance, seemingly took matters into their own hands. KPMG state that 72% of familial fraud is committed by fraudsters aged over 45.
It is not just the elderly that are affected by family fraud – those who have lost mental capacity are also vulnerable to this issue. This can happen at any age because of stroke, dementia or a brain injury. Most people incorrectly assume that their partner can automatically take over management of the household finances and bills, should they lose mental capacity. But if you haven’t put a Lasting Power of Attorney in place, that’s not the case – joint accounts can be frozen, a family member or close friend will have to make an application to the Court of Protection for a Deputyship Order, and it might not be who you would have chosen.
Hitesh Patel believes the family fraud cases that KPMG have uncovered are just the tip of the iceberg. He explains: “Frauds of this nature often go unreported as embarrassed victims seek to keep it in the family and forgive and forget.”
President of the Association of Directors of Adult Social Care Ray James notes that most fraud cases within the family are highly complex. “Many of the cases we deal with involve family members, and they are rarely straightforward. There are often tensions within the family anyway over who is paying for what or who has access to bank accounts, who has PINs or is in charge of savings. Cases can become very messy.”
How to protect yourself from family fraud
Making a Lasting Power of Attorney (LPA) is a big step that anyone over the age of 18 should take towards avoiding intra-family financial abuse. This allows you to nominate someone you trust to manage your affairs, should you become unable to do so. However, simply making a Lasting Power of Attorney is not enough – it is important to let all of your family members know that you have one (you can give details of up to five people to notify when making a Power of Attorney), and to ensure it is stored somewhere safe should it be needed – for example, with your lawyer. Only 15% of over-75s have a Lasting Power of Attorney, leaving a large portion of the elderly population at risk.
You should also consider whether there are other elderly members of your family who might need to have a Lasting Power of Attorney in place. April King Legal’s team offer home visits for those who are not able to get to one of our locations.
Additionally you need to make sure your Will is kept up to date and again, have it stored safely by your lawyer. Make sure your family knows where the Will is stored and keep a copy at home with your correspondence.
We offer a free pack which provides further information on the benefits of making a Lasting Power of Attorney – click here to get your copy You can also call our head office for your pack on 0800 788 0500 or email firstname.lastname@example.org. If you would like to make an appointment to discuss making a Lasting Power of Attorney or reviewing your Will with one of our legal team, we would be happy to see you at one of our locations across the UK, without any obligation. We also offer home visits if this would be more convenient.