A power of attorney is a legal instrument that authorizes another person to make financial, legal, or medical decisions on your behalf. It might be broad (allowing the agent to make any legal decision on your behalf) or particular (giving the agent specific powers such as handling a property sale).
The person having the power of attorney, known as the agent or attorney-in-fact, is obligated to uphold their fiduciary duty by operating in good faith and in the best interests of the person granting the power of attorney, known as the principal. The agent must prevent conflicts of interest, keep secret information private, and refrain from abusing their power.
A power of attorney scam happens when someone illegally utilizes the authority entrusted to them by a power of attorney to steal money or property from the principal. This may occur when a dishonest person persuades an elderly or vulnerable person to sign a power of attorney, then utilizes it to access their bank accounts, sell their property, or take other acts to profit themselves.
To avoid power of attorney frauds, carefully choose an agent and have a reputable attorney evaluate the power of attorney agreement before it is completed.
What’s an Example of Financial Power of Attorney Scams and the Elderly?
The following is an example of power of attorney fraud affecting the elderly:
An elderly person living alone with no family nearby who needs financial help is contacted by a person claiming to be a financial expert. This person persuades the elderly person to sign a power of attorney, granting the individual control over their money.
The “advisor” then acquires access to the elderly person’s bank accounts, investments, and other assets and starts mismanaging them. The elderly person recognizes they are losing money and assets over time, but they cannot recover control of their finances since they have previously signed a power of attorney. The “advisor” continues to mismanage the finances, taking advantage of the old person’s frailty and lack of assistance.
Power of attorney fraud is a sort of elder abuse, which is defined as purposeful or negligent behaviors that cause injury or provide a severe risk of harm to an older person.
Power of attorney fraud is a particularly pernicious kind of elder abuse since it often includes the elderly person’s financial adviser or another trusted figure being used. This form of abuse may have major financial and emotional ramifications for the elderly victim, who may be unable to sustain themselves or regain their lost possessions.
Elder abuse is a rising issue, and it’s critical to recognize the warning signs and take action to protect older persons from financial exploitation and other types of elder abuse. If you feel an older person is being mistreated, you should notify the proper authorities. You may also help safeguard elderly people by teaching them about the hazards of power of attorney fraud and encouraging them to choose their financial advisers and other trustworthy persons carefully.
What Can the Victim of a Scam Do?
A victim of a power of attorney scam may take the following steps:
- Contact law enforcement: Report the fraud to local law police or the FBI, along with any proof or documents.
- Seek legal counsel: Consult with an elder abuse attorney or a legal aid agency to discuss your possibilities for legal action against the fraudsters.
- Close accounts and safeguard assets: Close any compromised bank accounts or other assets and take measures to secure any remaining assets.
- Contact the following financial institutions: Notify your bank, investment companies, and other financial institutions about the fraud and request that any impacted accounts be frozen.
Seek aid from friends, family, and community groups, as well as professional therapy, to help you deal with the emotional effect of the fraud.
Share your experience and raise awareness about power of attorney frauds to help others from becoming victims.
If you feel you have been the victim of a power of attorney fraud, you must act swiftly and firmly. The sooner you act, the higher your prospects of retrieving your possessions and avoiding additional damage.
What Are the Penalties for Abuse of Power of Attorney?
The penalties for misuse of power of attorney vary by jurisdiction but often include both criminal and civil sanctions.
The following are possible criminal punishments for misuse of power of attorney:
- Fraud: A person who abuses a power of attorney for financial benefits, such as embezzling cash or stealing property, might face criminal prosecution for fraud.
- Theft: Criminal theft charges may be filed against someone who takes money or property from someone over whom they have power of attorney.
- Elder abuse: There are particular criminal consequences for elder abuse in various places, including accusations of exploitation, neglect, or mistreatment of an old person.
The following civil fines may be imposed for misuse of power of attorney:
- Restitution: A court might require the person who abused the power of attorney to restore any stolen monies or property to the person over whom the power of attorney was issued.
- Damages: A court may give a person abused monetary compensation for financial loss, mental suffering, and other damages.
- Revocation of power of attorney: A court may withdraw a power of attorney that has been misused, giving the person who was awarded the power of attorney responsibility over the individual’s financial, legal, or medical matters.
- Injunctions: A court may impose injunctions to prevent future abuse, such as prohibiting the person who abused the power of attorney from accessing bank accounts or other assets.
Administrative penalties, such as the suspension or revocation of a professional license or fines and penalties issued by regulatory agencies, may also be imposed for misuse of power of attorney.
In general, the sanctions for abuse of power of attorney are intended to hold persons responsible for their conduct while providing relief and compensation to the victim. However, pursuing criminal or civil charges may be complicated and time-consuming, so it’s critical to get the assistance of an experienced attorney if you suspect you’ve been the victim of a power of attorney fraud.
Do I Need a Lawyer?
Yes, you may need the services of a family lawyer if you have been the victim of a power of attorney fraud or are contemplating providing someone power of attorney over your affairs. An attorney may assist you with legal advice, counsel, and representation throughout the procedure.
If you are the victim of a power of attorney fraud, a lawyer can assist you in understanding your rights, preserve your assets, and pursue legal action against the person who abused the power of attorney. An attorney may also provide you assistance and direction while you navigate the legal system, as well as assist you in recovering any stolen money or property.
If you are thinking about giving someone power of attorney, a lawyer can help you understand your legal rights and duties and advise you on the best method to safeguard your interests. An attorney may also assist you in drafting a power of attorney arrangement that matches your individual requirements and is legal.
A family lawyer is a sort of lawyer that represents families and people in several legal situations, including power of attorney frauds. Family attorneys understand the rules governing power of attorney and can provide you with legal advice and counsel to defend your interests and rights.
If you suspect you have been the victim of a power of attorney fraud, or if you are thinking of providing someone power of attorney over your affairs, you should consult with an experienced family lawyer. A family lawyer can provide advice and help you navigate the legal system and accomplish your objectives.
So, if you need assistance with a power of attorney issue, contact a family lawyer right away. They can assist you in understanding your rights and duties and offer you the counsel and assistance you need to accomplish your objectives.