A recent investigation carried out by the BBC Radio 4 consumer programme You and Yours has revealed that taking control of people’s financial affairs is a process “wide open” to fraud, the Guardian reports.

The investigation discovered that when applying for lasting power of attorney, there were no routine checks for identity or effective fraud controls.

Lasting power of attorney is used to help manage the affairs of vulnerable or seriously ill individuals, usually those who do not have mental capacity, such as learning disabilities or dementia. Stamped aper documents can be checked by banks or investment companies against a national register.

Falsified names and addresses

Lawyers have warned that scammers could submit a “complete work of fiction” to the Office of the Public Guardian, the government body that oversees lasting power of attorney, which uses falsified names and address and be given the legal document that allows them to take over a person’s affairs.

You and Yours spoke to a victim whose empty home was targeted by someone who obtained lasting power of attorney without any proper checks. The fraudsters visited the woman’s flat to change the locks and then tried to sell the property using the documents they had obtained.

Labour’s shadow justice secretary, Steve Reed, has called for an inquiry into the scheme and has also written to the secretary of state for justice, Dominic Raab.

Power introduced in 2007

Lasting power of attorney was introduced in 2007, based on decades of case law. It can give the holder access to a person’s bank accounts, investments and savings and can also be used to sell a house.

There are though to be about 3 million documents in the official registry. It can take up to 40 days for an application for lasting power of attorney to be registered and it present, the application process costs £82.

In the case You and Yours highlighted, the fraudster successfully obtained the LPA using false names and addresses. The victim’s signature was forged, and the woman’s date of birth was incorrect.

Fraudster claimed to be woman’s sister

Lawyers who had been approached to handle the flat sale raised the alarm after asking for a doctor’s note confirming that the victim wasn’t well enough to handle the sale. She was then informed that a suspected fraudster was trying to sell her home claiming incorrectly to be her sister.

When the woman complained to the Office of the Public Guardian, she was advised on at least two separate occasions that the fastest way to resolve the matter would be to say that she had allowed the fraudster to take over her financial affairs, and then ask for the lasting power of attorney to be revoked.

Shari Vahl, a reporter for You and Yours, said that the lasting power of attorney system was “wide open” to fraud.

Handed out without checks

She said an LPA was probably the most powerful document in any person’s financial life and that they were being handed out without checks.

You and Yours investigation established that a person with the same name as the fraudster had made a number of applications to local councils, asking for the addresses of known empty properties, suggesting that other properties may be at risk from a similar fraud.

The annual report of the Office of the Public Guardian for 2020-21 says less than 0.1 percent of registrations are suspected to be fraudulent. There were more than 680,000 successful local power of attorney applications in 2020-21.

An Office of the Public Guardian spokesperson said that abuse of the power was extremely rare, but the office intends to introduce more safeguards against fraud.

Finders International is an award-winning probate research firm.  Our regulations and credentials include the IAPPR, Friends Against Scams, we are approved APSE partners and are the first probate research firm to be approved by the Chartered Trading Standards Institute (CTSI).  For a full list of our credentials, please visit our website here.  Alternatively, you can call +44(0) 20 7490 4935 or email [email protected]