Consumer rights: My mother's dementia led to freeze on affairs
NatWest acts to refund charges and release funds from frozen current account / Beware estate agents touting for an instruction after you've found a buyer
Sunday 24 January 2010
My mother is elderly, has dementia and lives in a care home. Until recently, she managed her own affairs and her care home fees were paid by direct debit from her current account which was topped up from her savings account as required.
During a visit to her local branch of the NatWest in July 2009, the bank clerk decided she wasn't capable of managing her accounts and froze them. An enduring power of attorney was in existence giving me, my brother and my mother's husband the power to manage her affairs, but it turned out to be invalid following the death of her husband. We've been left in the very tricky position of having to apply for a new lasting power of attorney so that my brother and I can manage our mother's accounts, but that will take some time to come through. In the meantime, her bank accounts are frozen and charges are being added.
I know from the correspondence we've had since you first got in touch that your mother's care home fees are still being paid although other transactions have stopped. This has proved to be a complicated case. While your mother has dementia she was capable of running her own affairs but occasionally got confused, as she did on her visit to the bank. All bank staff are trained to be on the lookout for situations in which they feel their customers' money may be at risk. The bank assures me that the decision to suspend some activity on your mother's accounts was not taken by the clerk in the branch that day but that she did report her concerns about your mother's mental capacity and the bank feels that it acted in your mother's best interests. The British Bankers' Association, the trade association for banks, says, "Banks will need to consider the consequences of not taking action to protect the customer as well as considering what will happen if they do. It can be a delicately balanced decision to make."
Following the visit to the bank at which the clerk became concerned, you were asked to produce the existing enduring power of attorney (EPA). As you discovered, it was invalid. Had it been drawn up differently it would have given you and your brother the right to operate your mother's account on her behalf and everything should have carried on smoothly. But the EPA had been drawn up in such a way that the death of one of the people named on it – in this case your mother's husband – rendered it invalid so the bank couldn't accept it. You and your brother now need a lasting power of attorney (LPA) in order to operate you mother's account. LPAs replaced EPAs two years ago for new applicants but anyone who already has a valid EPA doesn't need to reapply.
If people believe or worry that at some point they will become incapable of making major decisions, including running their bank accounts, they might want to think about setting up an LPA which allows someone they trust to make decisions for them. The LPA is a powerful tool and can cover decisions about healthcare and welfare as well as money and property, so it's advisable to have the help of a solicitor with experience of LPAs to help you to draw one up. Depending on the content of the LPA, it can either take effect straight away or at a point in the future when you're unable to handle your affairs. It needs to be registered with the Office of the Public Guardian before it can come into effect. LPAs are complicated and quite expensive so don't leave it to an amateur to help you. Get specialist advice.
In this particular case, I know that an LPA has now been applied for and should be through in a few weeks. At that point the bank will be legally obliged to unfreeze your mother's account. In the meantime, I've been talking to the bank and have been assured that the care home fees will go on being paid. "We take the security of customers' accounts extremely seriously, and if we have any reason to believe that a customer's assets could be compromised, we will take steps to safeguard them. We are now actively working with Mrs W and her sons to ensure the account is managed effectively and securely. We can reassure Mrs W and her sons that this has not at any time impacted her care home payments or the interest she receives on her account."
Other problems with your mother's bank accounts have now been resolved too. No funds were being transferred from the savings account to the current account to cover the care homes fees – and the current account was in overdraft, attracting charges of £15 a day. The bank wasn't accepting payments into your mother's account either and one of her monthly pension funds stopped paying her until the situation was resolved. The good news is that the bank told me this week that charges will be refunded to the account and that it is negotiating with third parties to reinstate her payments.
I've been trying to sell my house for a while now and last week I got an offer which I accepted. The following day, I had a call from a firm of estate agents – not mine – asking about my property. When I told them I'd accepted an offer they told me they could get me more money. It's a considerable difference and I'm tempted. Is it all above board?
I've talked to the Property Ombudsman's office which deals with complaints about estate agents. The practice is referred to as touting and there's nothing illegal about firms trying to bring in more business. But you could end up out of pocket. The first thing to do is to check the agreement you signed with your own estate agent. Are you still under contract with them and, if so, what notice, if any, do you have to give that you are changing agents? If you sign an agreement with the second agent and they sell your house for you while you're still under contract with the first agent you could end up paying two lots of estate agents' fees. Do the figures. That might eat up all the extra money the second agent manages to get you. Before you sign any agreement with the second agent, he or she must warn you about the possibility of having to pay two sets of fees.
The other thing to think about is how realistic is it that the second agent really will get you a better deal than the first. There's nothing to stop you from changing your mind and pulling out of the agreement with your buyer given that you haven't exchanged contracts. But you have to remember that the second agent is doing a hard sell on you to get your business and there's no guarantee that he or she will be able to deliver. Given that you've been waiting a while for this buyer you may decide that a bird in the hand is worth two in the bush.
Do you need a financial makeover?
Write to Julian Knight at The Independent on Sunday, 2 Derry Street, London W8 5HF firstname.lastname@example.org
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