On 21 September the Financial Conduct Authority (FCA)
published a paper, Ageing
Population and Financial Services, which included a suggestion that more
should be done to enable individuals (‘donors’) to make, register and store
Lasting Powers of Attorney (LPAs) online.
Currently, LPAs can be registered online but they require
physical signatures. Once complete, the donor needs to take certified hard
copies, or the original copy, to get them registered. The FCA has suggested
that an online system, which takes the user from the start of the process
(making an LPA) through to registration and storage of the LPA, would save time
and reduce administration.
Similar suggestions have recently been made in relation to
the making of electronic wills.
These proposals may save time, paper and energy, but there
is a real risk that safeguards designed to protect individuals will be
compromised.
Dementia and Alzheimer’s disease became the leading cause of
death in England and Wales in 2015, and financial exploitation of the elderly
is on the increase. Indeed, LPAs were introduced in 2007 following concerns
around the potential abuse of existing Enduring Powers of Attorney (EPAs).
Figures obtained by Old Mutual Wealth suggest that in recent years there has
been a marked increase in the number of LPAs registered, from 128,745 in 2010,
to 441,361 in 2015.
As a result of previous concerns with EPAs, the ‘newer’ LPAs
contain a number of safeguards. They require a ‘certificate provider’ to
confirm that the donor understands what (s)he is doing and that nobody is
forcing him/her to make an LPA. In addition, original signatures are required
in the presence of a witness. The FCA paper notes that this element ‘arguably
reduces the risk of fraud’ which, of course, is the intention.
Strangely enough, the FCA paper concedes that some elderly
individuals may not want to use online services. In relation to online banking,
these individuals often allow their carer or other trusted person to access and
check their account. If the LPA process was moved online, surely the same would
apply? There is a huge risk that the elderly or vulnerable could be pressured
into creating LPAs online. Making an LPA gives others authority to manage your
financial affairs and/or health and welfare, and it is therefore an incredibly
important document. The idea that some may find an online procedure
overwhelming and, therefore, delegate the process to a third party, seems like
a recipe for disaster.
Amy Newhall
(née Parkinson) is an associate in the Private Client team at Kingsley
Napley LLP. This article first appeared as a blog post on the firm’s Insights
blog
