Scandal of elderly mugged by post

The Guardian, January 22, 2000

Stories of elderly folk losing their cash to phoney gas, water and electricity workers who gain access by claiming there is a dangerous leak, are all too frequent. Despite warnings from police and neighbourhood watch groups, these incidents still appear almost weekly in local papers.

But less well publicised - although involving far more money - are the "legalised muggings" the elderly can suffer from sources ranging from home improvement salespeople to phoney overseas lotteries as well as commission chasing life insurance agents.

Next week, Help the Aged's Mervyn Kohler will chair a conference on Advising The Elderly Client where lawyers and those involved in care will discuss how best to protect an ageing population that is becoming richer. One in 14 is now aged over 75; the proportion will rise to one in nine by 2025. Better pensions and home ownership have increased the wealth of many older people.

Unlike child protection, where rules on how to deal with anyone aged under 18 have become far more stringent, those governing the elderly - especially those who may be confused or physically disabled - remain sketchy, open to different interpretations, and inadequate, say those who take care of elderly relations.

Equally, those involved with older people say they should have the liberty to make their own mistakes - and there is always a danger that rapacious relatives and friends will exploit weak moments.

Nigel Waskett, a doctor from Newport, south Wales, spends several hours a week trying to save an elderly great-aunt of his first wife from her "foibles". She has a history of mental illness and has shown irrational behaviour from time to time over the past 40 years.

Now, after years of trying to sort out her affairs to her best advantage, he wants a change in the law so that a contract signed with someone over a certain age and over a set value would not be valid unless there was a third party present.

His first difficulty came from a double glazing seller who persuaded her to buy a £12,000 conservatory which did not fit the house. After £700 had been spent on legal fees to recover the £2,000 deposit, the firm had gone bust.

Charity Age Concern, published a consultation paper on "combating cowboy builders" last year. It says: "old people can be daunted by the complicated process of seeking a reliable builder." It is critical of building trade bodies setting up their own accreditation schemes but believes there should be a list of reputable contractors backed by identity cards.

The conservatory was just the tip of the iceberg, Dr Waskett says; it is a major job trying to protect her from herself. "The system is frustrating. You can wave legal papers; some take a lot of notice and are sympathetic while others ignore you."

She suffers from an addiction to illegal lotteries and phoney prize schemes. Last week, she received 46 letters about such schemes at her home. These included missives from the Consumer Enrichment Centre, which operates from a London post box address, which appears to say she had won £6,000; the North American Award Center in Missouri; the National Audit Centre in Unionville Ontario; Paragon Worldwide Lotto Fund in Nova Scotia, and from the grandly named Award Determination Tribunal at the Office of Internal Audits at United Equity Ltd, which can be tracked back to a post office box number in Ashford, Middlesex.

Dr Waskett says his great aunt has spent more than £6,500 on these schemes and never received a penny. He is unhappy with the way HSBC took no action when he alerted it to her use of a full chequebook in less than a week, all on these catchpenny plans. He believes that banks should do more for vulnerable clients.

After some months, he managed to get his relation - in a moment of lucidity - to sign an enduring power of attorney.

But the way banks reacted to it varied from helpful to offering the old lady more cash to feed her lottery craving. In one week alone, she spent £431.

He says: "She has opened more bank accounts than you would think possible in a variety of names - her maiden name, those from her two marriages and hyphenated versions of the three. I thought the power of attorney document would help. Lloyds TSB were extremely helpful. They gave me full powers to act on her behalf. NatWest was understanding with the chequebook but said it would have to give her money over the counter if she asked. Then she went to the Co-op. They allowed her to open an account but were very decent when I showed them the document and they agreed to close the account."

The problem bank was HSBC which refused to talk to Dr Waskett without his relation present. This, he says, is pointless given her personality and condition.

Although she was going through chequebooks in a week, HSBC let her build up an overdraft of £3,500, gave her a credit card and then suggested she took out a personal loan.

Dr Waskett found that because she was reasonably well off - a widow with a house worth £200,000 and shares - her credit rating was perfect and she could easily borrow against the value of her property. Now in her late seventies, she has also reversed the enduring power of attorney - as is her legal right - on occasions. That allows her to borrow more. HSBC's headquarters in London now says it regrets the problem and would like to discuss the affair with Dr Waskett.

Helen Parsons from Stroud, Gloucestershire, is hoping her local MP David Drew will put forward an amendment to the Financial Services and Markets Bill to protect the elderly. Her mother, Ruth Waterhouse, who died last year, was persuaded to buy an annuity on her husband's life in 1992 by a firm of accountants. The Standard Life policy was designed for a high immediate payment but was worthless when the holder died - there was no guarantee of a minimum payout.

Ms Parsons says: "She was blind in one eye, and had a cataract on the other. She would not have been capable of reading the small print. She ticked the wrong box. My late father was very ill and died nine months later. The loss on the £40,000 policy was around £36,000."

Last September the north London accountants had to pay fines and costs totalling £16,500 when an Institute of Chartered Accountants tribunal upheld complaints from this case. But the family's attempt to gain compensation has run into a legal dead-end. Ms Parsons says: "I feel guilty that I was not there. I shall never forgive myself. She should have had someone to help her."

But legal protection and restrictions have to be balanced against civil liberties of the elderly, including the freedom to spend their money in ways others might think unwise. "It's a very complicated legal and policy area," says Alexandra Mason, a lawyer specialising in enduring power of attorney and court of protection issues.

"You can start from the proposition that the elderly can be vulnerable but you must still recognise that they may be capable of managing their finances and property as well as someone younger."

Governments of both complexions have been wrestling with the issue of elderly and other people who are not in full possession of their faculties. A Law Commission report in 1995 was followed by a consultation paper Who Decides in 1997. Firmer proposals came late last year in Making Decisions and looked at:

* Defining mental capacity and the person's best interests - around one in five 80 year olds has some degree of mental power loss, according to Help the Aged;

* Replacing enduring powers of attorney with continuous powers of attorney - the old system limits powers to money and property, while the proposed continuous system would extend to medical care and daily life issues;

* Modernising the court of protection so it could resolve disputes about a person's mental condition.

But these will be enacted only "when parliamentary time allows" and offer no help to the vulnerable as opposed to the "mentally incapacitated."

At Help the Aged, Mervyn Kohler says "there will be reforms at some stage, but don't bet on when. The whole area is one that people do not want to talk about and it's never the most urgent issue."

Mr Kohler believes that the law surrounding enduring powers of attorney can present problems, especially when the subject is "devious". There is no central register or clearing house so those with the powers have to show their papers to everyone.

One idea would be to copy the driving licence scheme with its compulsory renewals for the over 70s and insist on regular checks on anyone over 70 to see if they are still capable of signing financial and other contracts. The government could also set up a "public guardian service, though that would be costly.

But the Human Rights Act, which comes into force this October, could throw the whole issue in the air. It will establish that the rights of the individual are paramount, including the right to live an unfettered life and enjoy one's property.