Inadequate Power of Attorney system is exposing people with mental health problems to financial abuse
16 July 2019
- People with mental health problems and their carers are being put at risk of fraud and legal difficulties, because existing tools for sharing financial decision-making such as Power of Attorney are unfit for purpose.
- One in five people with mental health problems in the UK are resorting to letting others use their credit or debit card on a weekly basis, and 15% regularly allow others to log in to their bank account.
- The Money and Mental Health Policy Institute is calling for the next Prime Minister to reform the Power of Attorney system, making support for carers and people with mental health problems a priority in the upcoming Social Care Green Paper.
- The charity is also calling for firms to offer other more flexible tools for sharing financial decision-making in a safe and effective way.
A new report published today by Money and Mental Health shows that people with mental health problems are more reliant on friends and family for help with money management, due to common symptoms such as reduced memory, increased impulsivity or difficulties weighing up complex information.
However, the research also shows that many people with mental health problems are struggling to safely gain this support from family and friends, because of the complexity and ineffectiveness of tools such as Power of Attorney. It highlights common concerns for people with mental health problems that Power of Attorney gives too much power to the third party, fails to reflect the fluctuating nature of mental health and is too difficult to use in practice.
As a result, many people with mental health problems are resorting to risky quick-fixes to get support from friends and families, which are leaving both them and their carers vulnerable to fraud or legal difficulties. New Populus polling (1) published in the report shows that:
- Two fifths of people with mental health problems (43%) have let someone else use their credit or debit card, and one in five (19%) do so on a weekly basis.
- One in five people (20%) who have experienced a mental health problem have let someone log into their online banking, and 15% do so each week.
- In a separate survey by the charity of over 250 people with mental health problems who have received help, less than a quarter (24%) said they have safe ways to give someone else access to their accounts (2).
- In a survey of over 100 carers by the charity, 60% said the way they support a loved one with money management puts them both at risk (3).
Money and Mental Health is calling for the next Prime Minister to include reforms to the Power of Attorney system in the government’s long-awaited Social Care Green Paper, as part of a broader strategy to support carers. In particular, it should give people and their carers a clearer variety of options for supported decision-making that don’t involve giving away full financial autonomy, which would also help essential services firms implement Power of Attorney more effectively.
The charity is also calling for firms to give people other tools to share financial decision-making -including options such as ‘carers cards’ or third party notifications on spending and bank balances – to help them gain support when they need it while preserving their autonomy.
Commenting on the report’s findings, Helen Undy, Chief Executive of Money and Mental Health, said:
“When you’re struggling with your mental health, getting help from family and friends to manage money can make the difference between staying on top of your finances or falling into serious debt. But the current Power of Attorney system just doesn’t meet the needs of many people with fluctuating mental health problems, who want to share some decisions, some of the time – without feeling as though they are giving away total control. Faced with a system that doesn’t meet their needs, people are relying on risky workarounds to access this support, like sharing PINs and passwords, which expose them to fraud and abuse.
“The new Prime Minister has an opportunity to improve the lives of millions of carers in the UK, and the 11 million people living with mental health problems, by fixing this broken system.
“We also want to see firms themselves offer a greater range of tools to help people share financial decisions, from carers’ cards to more options for third party billing and notifications. This technology exists, it’s about time it was used where it’s really needed.”
For more details, and for any other media enquiries, please contact Brian Semple, Head of External Affairs at Money and Mental health, on 07595 439 638 / 07935 216 804 firstname.lastname@example.org
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