People using power of attorney for friends or relatives who are unable to manage their own affairs are not being treated in a proper manner by banks and building societies, according to a public office.
The Office of the Public Guardian (OPG) – which issues power of attorney – has raised concerns that some branch staff lack awareness about the different types of power of attorney, leading to delays for customers, some with urgent financial needs.
Banks and building societies are now assessing whether their training procedures are adequate.
Power of attorney is a legal authority that allows individuals to act for others who no longer have the mental capacity to manage their own legal or financial affairs. Up to 200,000 powers of attorney have been issued since 2007, when a new type of authority came into force (see box).
The Financial Ombudsman Service (FOS), a dispute resolution service for consumers, said that the complaints it received suggested that bank staff as well as consumers were “sometimes confused or uncertain about the different rules for old and newer types of powers of attorney, and about how the power of attorney should operate in practice”.
The Ombudsman highlighted cases where banks were directed to pay compensation to consumers for unnecessary delays, legal costs and inconvenience, caused by errors and misunderstandings relating to power of attorney.
The OPG recently met with banks and building societies to discuss ways to improve service for those trying to operate their powers. The main issue discussed was lack of awareness among branch staff around the different types of power of attorney and deputyship and how they were used.
A spokesperson for the Building Societies Association said that it, along with the British Bankers’ Association (BBA), had “accepted that this was a problem area and that more investment in training and provision of expert support was needed”.
“We have been holding constructive discussions with organisations such as the Office of the Public Guardian, Law Society, Solicitors for the Elderly and Age UK,” added the BBA.
“We are keen to ensure the system is robust for customers and gives them the assurance they need.”
Banks said that the number of complaints the industry received about PoA was low.
The Ombudsman also noted that if a bank had reason to believe the attorney was abusing their power, it might have to balance its duty to carry out the instructions of the person to whom the customer had given power of attorney with its “wider concern to protect its customers”.
Age UK, the charity, said that the training review was a “step in the right direction” but that much more needed to be done to raise the standards in banks.
“There is a lot that banks can do to provide a better service and it should be possible to resolve many of the simpler cases much more quickly,” said the charity.
“It is vital that banks ensure their staff understand that people presenting lasting powers of attorney or deputy documents and papers are often in stressful situations and are also likely to have urgent financial needs.”
Meanwhile, the BBA has issued new “plain-English” guides to ensure that people lacking mental capacity get the banking services they need.
The guides – one for England and Wales, and another for Scotland – offer advice on how to open an account and manage money for those unable to manage their own financial affairs, and set out the documentation that a bank will need to put the correct arrangements in place.