Power of attorney

People can make a power of attorney if they’re worried they won’t be able to manage their own financial affairs in the future. This gives authority to another person to manage their finances.

If a person has lost mental capacity the Court of Protection can appoint a person to make decisions on their behalf. The appointed person is called a deputy

It’s distressing when a person loses their mental capacity so if you’re handling complaints where this has happened, those complaining may be very upset. Many of these disputes can be avoided by good training, communication and processes within your business.

If a case does eventually come to us, we aim to settle these complaints as fairly and sensitively as possible.

What is power of attorney?

A power of attorney is a legal document. People make them to give one or more other people the authority to make financial decisions on their behalf. 

The person making the power of attorney is called the ‘donor’ – or in Scotland, the ‘granter’.

The person taking on responsibility is called the ‘attorney’.

While a donor still has mental capacity, they can:

• continue to manage their own affairs
• change or cancel their power of attorney

A power of attorney is no longer valid after the donor has passed away.

What attorneys can and can’t do

Attorneys agree to act in the donor’s best interests – they don’t need any legal experience to do this.

Having power of attorney doesn’t mean the attorney will be able to manage the donor’s finances immediately. First, they need to register the power of attorney with the financial business they want to give instructions to.

If a donor has chosen to have more than one attorney, they may have specified whether their attorneys may act either ‘jointly’ or ‘jointly and severally’. You should check if this applies in the case you’re dealing with.

‘Jointly’ means permission from all attorneys is needed before you can carry out their instructions.

‘Jointly and severally’ means each attorney can act together or on their own – it’s up to attorneys to choose which way they prefer to act.

A donor may have:

• stated they wanted their attorneys to decide some matters jointly but others severally
• specified certain affairs that they don’t want their attorneys to manage at all

What we look at

There are different laws in England and Wales, Scotland and Northern Ireland, so we need to check that you’ve acted within the law for the relevant region.

We also check that you’ve acted correctly according to the powers listed in the power of attorney document. If we find you allowed the attorney to do something they didn’t have permission for, we’ll usually tell you to give compensation to the donor for any financial loss.

Sometimes, an attorney tells us a business has wrongly carried out an action on behalf of the donor. For example,

• made an investment that shouldn’t have happened
• certain transactions weren’t authorised

We understand that if the donor has already lost mental capacity, complaints like this can be difficult for both you and us to investigate, because the donor may no longer be able to give their version of events. However, we’ll look at all the evidence available to reach a fair decision.

We know that people can often be distressed bringing power of attorney complaints, so we’ll check that you’ve treated the customer in a sensitive and sympathetic way. For example, we’ll want to know if your business has:

• trained your customer-facing staff to deal with people using powers of attorney
• clearly explained to your customers how to set up power of attorney on an account
• made sure customers understand how finances are managed on these accounts
• caused delays or given poor service which affected the donor or attorney

If we find in the donor or attorney’s favour, we’ll ask your business to put things right for them.

However, we know that businesses need to use their judgement carefully and balance the needs of attorneys while also carrying out the donor’s wishes. For this reason, we sometimes agree that your business has acted appropriately and we won’t uphold a complaint.

For example, we see complaints where a business has refused to accept a cheque written by the attorney, transferring money from the donor’s account to their own. Without evidence that the funds were to be used for the donor’s benefit, we might agree that the business’s decision was reasonable.

If a power of attorney has been abused, we’ll check you’ve reported the matter to the relevant authority for their region, such as the Office of the Public Guardian. 

Types of complaints we may not uphold

There are certain complaints we don’t usually uphold. For example, we receive complaints from donors and attorneys about extra security checks you may have in place on your power of attorney accounts. However, we understand that your business needs to have this type of security in place and we wouldn’t usually tell you to change this.

You may offer different services on power of attorney accounts compared to your standard accounts. For example, you may offer online banking on a standard account but you don’t make it available to donors. We wouldn’t usually tell you to change this because we understand that your business has the right to decide what services you provide. However, we’ll always check that you’ve given clear information so that donors or attorneys can make informed choices.

Sometimes you may be involved in a dispute between the donor and the attorney. This can happen, for example, when:

• the donor is losing the ability to make decisions but has previously been involved
• a donor or family member disagrees with a decision an attorney has taken

We wouldn’t expect you, as a business, to get involved in a family dispute or to decide if someone has mental capacity. We won’t make decisions on these issues either, so we may decide that this type of case would be better dealt with by the Office of the Public Guardian or by the courts. You can read further guidance if you’re dealing with complex issues around mental capacity.

Putting things right

If we uphold a complaint against your business, we’ll make sure that the donor hasn’t lost out as a result of your mistake. In some cases, we’ll ask you to pay compensation to the donor.

Donors can have more than one type of power of attorney, outside of their financial affairs, such as health and welfare. We’ll need to assess if your mistake has had any impact on their wider affairs.

We usually don’t ask you to give compensation for distress and inconvenience to any third party such as a family member or an attorney. However, if we think a donor has experienced extra distress seeing their attorney distressed, we may award additional compensation to the donor.

Resources

• Office of the Public Guardian (England and Wales)
• Office of the Public Guardian (Scotland) 
• Office for Care and Protection (Northern Ireland)