Action needed on elder financial abuse reform by Christmas

20 February 2018

The Australian Bankers’ Association has today called on the Federal Government to act now on financial abuse against the elderly and resolve three key issues by Christmas.

Financial abuse against elderly Australians is a significant problem, with the Seniors Rights Service estimating 40 per cent of elder abuse cases relate to financial exploitation. 

In a speech delivered to the 5th National Elder Abuse Conference today, ABA CEO Anna Bligh said that three key decisions need to be made by the Federal Government to implement meaningful reform and empower banks to help address the issue of elderly financial abuse.

“There are far too many heartbreaking stories of elderly, vulnerable Australians who have been financially exploited by family members or close friends,” Ms Bligh said. 

“Bank staff are on the frontline of this issue and see firsthand the financial abuse against the elderly, however are often hamstrung to confront the issue. 

“Banks are determined to play their part and are asking for key changes to the law to empower their staff to make good faith reports of financial abuse against the elderly,” she said.

The following changes were recommended by the Australian Law Reform Commission in 2017 and would make a big difference:

  • Legal changes to help bank employees safely report suspected financial abuse to a designated body
  • A national register of power of attorney orders 
  • A standardisation of power of attorney legislation. 

Currently there is nowhere for bank staff to report suspected cases of financial abuse. Police generally require the customer to make a complaint and current state trustees and public advocacy offices often require the bank to make a formal application and provide detailed information about the customer, for example their medical history. This is not an appropriate role for the bank. Australia needs an appropriate designated organisation where bank staff can report the suspected financial abuse for investigation. 

“Bank staff are not qualified to make assessments about a customer’s competency and are limited by legal and confidentiality obligations, therefore it’s important they have an appropriate body to flag suspected abuse for investigation,” Ms Bligh said.  

“Also, Federal and State Governments need to address the inconsistency in the power of attorney legislation which is making it overcomplicated for employees to detect and report abuse.

“From state to state there are differences between formal substitute decision making legislation, which can limit banks’ ability to detect and report financial abuse of customers.

“In most states such as NSW, Queensland and Victoria, powers of attorney are not required to be registered formally, making it hard for banks to check the legitimacy of a power of attorney. 

“If there was a national register with consistent laws across the country it would help banks – and indeed other financial institutions – to verify the authority of a power of attorney or court-appointed administrator when they present themselves as acting on behalf of a customer,” she said.

The challenges banks have in reporting suspected financial abuse were highlighted by the Australian Law Reform Commission in its 2017 report to the Federal Government, Elder Abuse - A National Legal Response. The ALRC recommended the establishment of an agency to investigate suspected financial abuse and a national register of power of attorneys, both of which will require the support of the Australian Government and all State and Territory Governments.

ENDS
Contact: Rory Grant 0475 741 007 

What’s new

Landmark reform package
11 Dec 2017
Read the full landmark reform package that will improve consumer outcomes and confidence in mortgage broking, prepared by the Combined Industry Forum.
Read more

ABA blog

Customers at centre of mortgage industry overhaul
Christine Cupitt, Executive Director - Policy, Australian Banking Association
Read more 1 Feb 2018

Latest tweets