Financial scams come in many different forms. A common type of financial scam is a power of attorney scam. This is where a person takes advantage of another by having them sign a financial power of attorney, which grants them authority to access the other’s bank accounts and assets. After being granted the power of attorney, the fraudster will then take the account monies and properties for their own use, often investing them in other areas so they are difficult to trace.
Elder persons particularly susceptible to financial power of attorney scams, because they often experience mental decline or injuries during aging. This is a form of elder abuse known as “elder financial abuse” and is often committed by the elder person’s own relatives or close friends.
A typical financial power of attorney scam begins when an elder person is placed in a care home or hospital due to injury or old age. In that position, they aren’t able to access their mail, bills, etc.- in short, they can no longer handle their own financial matters.
Then, a relative or friend may approach the elderly person and have them sign a power of attorney authorizing them to manage their financial affairs. The fraudster will then use the power of attorney to appropriate money and property for their own use. The elderly person may not find about the scam until much later on, when it is discovered that their bank accounts funds are missing, or that the name on the title to their property has changed.
In most cases it is possible for the elderly person to revoke the power of attorney, if they signed it knowingly and willingly. This is because the person named in the power of attorney still has a “fiduciary duty” to the elderly person.
The fiduciary duty means that they can’t simply take their funds just because they’re authorized to sign papers on their behalf. They must manage the person’s financial affairs using good judgment and with reasonableness. Obviously, looting the person’s bank account would be a breach of this fiduciary duty.
As a result, the elder person may revoke the power of attorney, and if necessary, file a lawsuit against the fraudster. They will likely need a lawyer to help them file the lawsuit in which they can obtain legal remedies like:
- Compensatory damages: these are intended to compensate the plaintiff for their losses caused by the financial power of attorney scam
- Payment of court costs: The fraudster may be required to pay any court costs and attorney fees associated with the lawsuit
- Punitive damages: Punitive damages may be issued where the defendant acted with gross negligence or willful disregard of the plaintiff’s rights. They are also available where the fraudster acted intentionally to cause losses to the elder person
In most cases, it will be necessary for a lawyer to help the elderly person file their claim, since the elder person had already needed assistance to begin with. If you or a loved one has fallen victim to a power of attorney scam, a lawyer can help you file a lawsuit to obtain the appropriate remedy. You might also want to hire a family lawyer before you execute a power of attorney, in order to protect yourself from scams in the first place.