Banks are failing their customers at a critical time

Posted on: July 27th, 2018

We have heard the mantra that having a Lasting Power of Attorney ‘just in case’ you need it is better than the personal and financial risk of losing capacity to handle your own financial affairs and welfare.

The alternative is for your family to apply to the Court of Protection for access which is not swift or cheap, at a time where time may be of the essence and lack of funding could have financial or personal consequences.

What happens should you make provision for such an event, but your bank stands in the way of your attorneys accessing your accounts?

In 2016 it was reported that it took Tony Venner, in his role as attorney, seven months to be allowed access to his wife Joan’s bank accounts, despite having all the correct paperwork. Barclays’ delay caused terrible distress to Tony and he spent the last few months of his wife’s life fighting a battle which he should never have had to contend with. With the support of his solicitor, Tony eventually did get access. Sadly his wife died two months later.

It would be hoped that banks and other financial institutions had taken a note of this and other similar failings. Instead, a May 2018 poll by Which? has shown that a fifth of attorneys have had a profound difficulty in registering and using a power of attorney.

As a member of Solicitors for the Elderly I have always strongly advocated the setup and use of powers of attorney. They are absolutely essential where an individual is unable to manage their own affairs whether financial or for health and welfare.

Unfortunately, I have also been called upon to support attorneys and those who originally completed the powers of attorney (the donor) in difficulties they have faced. Not due to any problem with the documents themselves or management of affairs issues, but in how banks process these legal documents at the very start.

Building Societies appear to be the most user friendly when registering powers of attorney with Coventry, Yorkshire and Nationwide leading the way with ‘good’ ratings of 75%, 85% and 76% respectively.

At the other end of the scale HSBC, Co-op and Yorkshire Banks received ‘poor’ ratings of 27%, 27% and 32% respectively, when attorneys were asked to recount their experiences.
Clients with full mental capacity to handle their own financial affairs, but who have struggled due to physical frailties can become locked out of their accounts due to the automatic assumption of mental incapacity where there is registration of a power of attorney. I have had a donor in tears having been asked to make a personal visit to the bank where they were unable to walk or travel without specialist equipment and suitable transport. . .

It is important to ensure that customers’ accounts are safeguarded. However, a properly executed power of attorney, particularly one which has been completed with the assistance of a solicitor, has as its main goal the intention of ensuring immediate and proper access to and management of an individual’s finances. Barriers and simple lack of knowledge and communication can only anger and upset people at what it already a difficult time.

One of the main complaints during the registration process is the inconsistent advice given. The results of the Which? poll also found that banks with a poor rating in customer service when handling power of attorney registrations such as HSBC and TSB did not have a dedicated team. This meant that those seeking advice may be dealt with by a call handler who would not have the proper training to understand powers of attorney.

I have assisted one gentleman and his attorney in registering a power of attorney with Barclays which after four arduous months was finally accepted. The document and correspondence was in turn ignored and accepted by various departments, further documentation was required and at one point I was required to quote chapter and verse of the Act from which the power of attorney gained its legal authority. A second round of correspondence subsequently followed to ensure that the bank admitted and understood their mistake. Via the complaints process which resulted in £2000 compensation to the client and my legal fees paid so the donor was not penalised for both following the law and the banks own processes.

Please do not let this put you off making a lasting power of attorney. It is still the best way to ensure that your financial matters are dealt with properly by the institutions in charge of your money. Being forewarned is forearmed and I would always urge donors to check with their current bank what the process is for registering a power of attorney and what obstacles there may be. If there may be a problem accessing accounts and funds in the future when they are most needed, the donor has the right and opportunity to choose a new bank at any stage.

Much of the issue appears to be with inconsistent approaches to the registration process leading to communication breakdowns. Perhaps it is time financial institutions to agree and follow a standard procedure, much as powers of attorney are standard prescribed forms themselves.

It is possible to access blank powers of attorney online, however, for proper guidance through the potential minefield of setting up, registering and acting under a Lasting Power of Attorney; it is always advisable to speak to a solicitor who specialises in such important documents. A professional can ensure not only that the forms are completed correctly, but that the donor and attorneys have the proper advice and guidance needed to facilitate a smooth process when the document is needed.

Lindsay Taylor is a Solicitor in the Wills, Trusts an Probate team.