Financial abuse is a growing issue, particularly among vulnerable individuals, yet it often goes unnoticed until it’s too late. Recent research by the Financial Conduct Authority (FCA) reveals that only four in ten vulnerable customers inform financial services providers of their specific needs. Additionally, a lack of training and inadequate monitoring mean that warning signs are often missed.
Professionals working in legal, financial, and estate planning services are uniquely positioned to spot early indicators of financial abuse. Without their awareness and intervention, perpetrators can act without scrutiny, causing significant harm to victims—many of whom are elderly or otherwise vulnerable.
The scale of the problem is increasing. Hourglass, a charity dedicated to preventing the abuse of older people, has reported a nearly 50% rise in calls from victims. Similarly, the Society of Trust and Estate Practitioners (STEP) found that 70% of its UK members have encountered cases of suspected or actual financial abuse, with 40% noting an increase in such incidents over the past two years.
In practice, financial abuse can take many forms, including the misuse of powers of attorney, coerced debt, and unexplained asset transfers. Unfortunately, in many cases, the abuse is only discovered after the victim has passed away, making recovery of assets possible—but offering no direct benefit to those who suffered.
So, what can be done? Raising awareness is key. STEP’s Spot the Signs campaign highlights red flags such as:
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A sudden change in financial control or new individuals taking an unusual interest in someone’s finances
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A decline in living standards despite apparent financial stability
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Unexplained transfers of wealth or assets
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Isolation from friends and family
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A carer or relative experiencing an unexpected improvement in their financial situation
For professionals in legal, financial, and estate planning sectors, training to identify these warning signs is critical. By being vigilant, asking the right questions, and taking action when needed, we can help protect those at risk and prevent financial abuse before it takes hold.
To read Rachel Waller’s full article in The Times, click here.
