Growing numbers of elderly and vulnerable people are having their finances raided by relatives abusing their legal powers, The Independent on Sunday has learnt.
Insurers and lawyers report a rise in the number of clients with mental health problems who have had their bank accounts emptied by greedy relatives who were appointed as deputies and should have been acting in their best interests.
The Court of Protection, which makes decisions on behalf of people deemed to lack mental capacity, appoints deputies to manage financial affairs. These deputies are usually close relatives who are expected to pay bills and help them to organise their money, but many are using the opportunity to steal their assets.
Whoever is appointed to manage a relative's affairs is required by the Court of Protection to take out a bond to act as an insurance from wrongdoing or mismanagement of their money. A leading insurance company told The IoS that last month the total claims relating to deputy bonds in 2013 had already exceeded last year's annual tally. It would not disclose its name, or the raw data, to protect its competitive advantage.
Gillian Hitchen, a Court of Protection solicitor for Pannone in Manchester, said she had seen the number of clients who had been abused in this way soar. "Over the past couple of years, we've seen a huge increase in cases where we've been appointed as deputy because of financial abuse," she said. "We see at least 12 of these cases a year now – and that's just the ones which come to us. When I started in this area, eight years ago, the cases were very rare. We might see one a year. Now it's become a matter of course. It's very sad."
Ms Hitchen believes the recession is playing a part. "I think it's the financial imperatives of the current climate," she said. "The people I've seen seem absolutely desperate and in dire financial circumstances. The opportunity is there and they take advantage of it."
Sean Tyrer, chief executive of the Money Carer Foundation, which specialises in helping vulnerable people to manage their money, said: "We get a lot of referrals all the time because people have been financially abused. My gut feeling is we're seeing more of this than we ever used to. When times are hard, and the economic climate is as it is, and people are without work, people become desperate which can make them financially abuse someone close to them. When times are better they wouldn't be presented with the moral decision."
An 81-year-old woman living in a Kent care home is a recent victim of this trend. Known only as Miss Buckley, she lost an estimated £150,000 after she gave legal powers over her affairs to her 59-year-old niece. The niece – referred to in court documents as "C" – sold her aunt's house for £279,000 in 2011 and spent £72,000 of Miss Buckley's money on setting up a reptile breeding business. C claimed this was a business investment for her aunt but also admitted that she had used at least £7,650 of Miss Buckley's capital for her own benefit. At one stage, she was taking out cash sums of £300 daily.
C said she loved her aunt and visited her once a week, but this was contradicted by the nursing home. It said that she had not visited her at all until 16 October 2012, which appeared to be only to get a signature on some unknown documentation. Justice Lush revoked C's legal powers in a Court of Protection hearing in December 2012.
Caroline Abrahams, charity director of Age UK, said: "This trend is disturbing. This kind of abuse is usually a crime and should be treated as such. There must be a zero-tolerance approach to any abuse whether through neglect, financial manipulation or physical or mental cruelty.
"We are pleased that the Care Bill will bring in a duty of care on local authorities to investigate such abuse. We fear that there are still many cases that are not reported, and we would encourage anyone who suspects that an older person is being abused to contact their social services department or the police straight away."
In another recent example of abuse, an 85-year-old widow from Lancashire who was suffering from dementia and living in a care home lost all her savings after appointing her niece as a deputy. The niece renovated her aunt's house, but she bought everything twice, meaning that a new bathroom and kitchen were also bought for another property. She also set up a tenancy agreement with tenants in her aunt's house using her own name and arranged for the tenants to pay her the rent in cash for more than two years. The local authority discovered what had happened when they realised her aunt's care fees were no longer being paid and an investigation of her accounts showed that the woman had spent almost all her aunt's £70,000 savings, leaving just £770. A claim was made against the surety bond and £58,000 was recovered.
The number of deputyships before the Court of Protection is understood to have increased in recent years, which may have contributed to the rise, as well as the ageing population. The Court of Protection now handles 24,540 cases a year, many of which are related to financial affairs.
10.8m people in the UK are aged 65 or over.
260 is the average weekly income for pensioners after housing costs – £372 for couples and £188 for single pensioners.
1.6m pensioners live below the poverty line, with a weekly income of less than £215 per week for couples and £125 for individuals. This equates to 14 per cent of pensioners – one million of whom live in severe poverty.
342,000 older people living in private households are abused each year. Age UK estimates this figure rises to 500,000 when abuse in care homes is included (roughly 5 per cent of the older population).
50 older people are neglected or abused in their own homes every hour by relatives, neighbours or care workers.
20% of phone calls to a charity helpline were about financial abuse, according to study by Help the Aged and Action on Elder Abuse in 2004.
17,700 was the average yearly disposable income for retired households in 2010/11.
76% of households occupied by older people are owned by the occupier, mostly outright.
121bn is the total spending power of households headed by someone over the age of 65.