The Australian Law Reform Commission has released an Issues Paper on Elder Abuse and Commonwealth Laws. The paper includes a section on financial abuse of older people.

The Issues Paper adopts the WHO definition of elder abuse as follows:

Elder abuse can be defined as ‘a single, or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust which causes harm or distress to an older person’. Elder abuse can take various forms such as physical, psychological or emotional, sexual and financial abuse. It can also be the result of intentional or unintentional neglect.

In discussing financial institutions the Issues Paper observes that financial abuse of older people will often involve misusing funds in a bank or other financial institution. For example, money may simply be withdrawn from an older person’s account, or used to pay someone else’s bills, without the account holder’s permission. Sometimes abuse might involve presenting banks with fraudulent or revoked guardianship or power of attorney instruments.

The paper raises the question of what, if anything, financial institutions might do to prevent and respond to financial abuse of older people.

It suggests that financial institutions can play an important role in preventing financial abuse in two ways:

• First, by helping to raise general awareness of financial abuse among their customers and by outlining measures customers can take to better protect themselves.
• Secondly, financial institutions can assist in protecting against financial abuse by detecting financial abuse and intervening. This requires training for staff about financial abuse.

Reporting suspicions of financial abuse

There is no legal obligation for financial institutions in Australia to report suspected financial abuse.

At present there is no statutory immunity for financial institutions reporting suspected elder abuse. The paper considers whether relevant legislation and codes in Australia could possibly be amended to protect financial institutions from any breach of contract, breach of confidentiality, interference with privacy, and defamation suit when the suspected financial abuse was reported in good faith.

Additionally some states do not have a government body to which financial institutions might report suspected abuse.

The paper also considers whether there should be mandatory registration of powers of attorney to assist in establishing the authenticity and currency of the document.

Understanding powers of attorney and financial abuse