In a speech delivered to the 5th National Elder Abuse Conference on Tuesday (20 February), ABA CEO Anna Bligh noted that financial abuse against elderly Australians is a “significant problem”, highlighting statistics from the Seniors Rights Service which estimated that 40 per cent of elder abuse cases relate to financial exploitation.
Therefore, Ms Bligh said that three key decisions need to be made by the federal government to implement meaningful reform and empower banks to help address the issue of elderly financial abuse.
According to the head of the ABA, there is currently nowhere for bank staff to report suspected cases of financial abuse, with the current system requiring the customer to make a complaint to the police and current state trustees and public advocacy offices, then requiring the bank to make a formal application and provide detailed information about the customer (i.e. their medical history).
Ms Bligh suggested that this was not an appropriate role for a bank and that, therefore, legal changes should be made to enable bank employees to report suspected financial advice to an “appropriate designated organisation”.
As recommended by the Australian Law Reform Commission in 2017, Ms Bligh also called for two other issues to be addressed to help target financial abuse of the elderly:
- A national register of power of attorney orders
- A standardisation of power of attorney legislation
The ABA has called for these changes to be made by Christmas 2018.
“There are far too many heartbreaking stories of elderly, vulnerable Australians who have been financially exploited by family members or close friends,” Ms Bligh said.
“Bank staff are on the frontline of this issue and see firsthand the financial abuse against the elderly; however, [they] are often hamstrung to confront the issue.
“Bank staff are not qualified to make assessments about a customer’s competency and are limited by legal and confidentiality obligations. Therefore, it’s important they have an appropriate body to flag suspected abuse for investigation.”
The ABA CEO added that banks “are determined to play their part” but said that federal and state governments also needed to address “the inconsistency in the power of attorney legislation which is making it overcomplicated for employees to detect and report abuse”.
She elaborated: “From state to state, there are differences between formal substitute decision-making legislation, which can limit banks’ ability to detect and report financial abuse of customers.
“In most states such as NSW, Queensland and Victoria, powers of attorney are not required to be registered formally, making it hard for banks to check the legitimacy of a power of attorney.”
Concluding, Ms Bligh said: “If there was a national register with consistent laws across the country, it would help banks — and indeed other financial institutions — to verify the authority of a power of attorney or court-appointed administrator when they present themselves as acting on behalf of a customer.”
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.