Guarding against bank account fraud

A cautionary tale about bank account fraud, and how to go about protecting a vulnerable person

Graham has a Lasting Power of Attorney for a close relative. This is his story.

Joint account set up to facilitate independence

I have LPA (Finance) for a close relative who has dementia. I operate the main bank account. To enable my relative to write small cheques, buy some general items and withdraw small sums of cash, I set up a joint account, which is fed with £100 per week.

I set up text alerts for the account being above £150 or below £30.

To my surprise I received an alert saying the account was overdrawn by £180. The bank had allowed a cheque for approximately £250, which had been obtained fraudulently, to be cashed, and were now charging for an unauthorised overdraft!
 

Lessons learnt about bank account fraud

Fortunately, I was able to persuade the bank to refund the cheque and all costs.

I learnt two things:

• 1. Bank accounts include an automatic “reserve overdraft” of (in this case) £300.

This has now been removed.

• 2. It is possible to have a “service alert” on the account, stating that my relative is “classed as vulnerable”, and if there is any doubt as to the legitimacy of a request, the joint account holder (myself) should be contacted.
 

Poor communication from banks

What I found incredible was that the bank, knowing the joint account holder was a vulnerable adult, left the £300 reserve overdraft in place and did not tell me about it. And that not even the local branch knew about the “service alert” option.

Following my complaint, this lack of knowledge is being corrected, but banks are not publishing the option.

Fellow carers and organisations have told me they are struggling with banks, which generally are very poor at understanding the needs of someone who has dementia, and find it difficult to deal with an account where one party is operating as Attorney.

I hope by publicising what can be done, others will be able to protect their loved ones while allowing them a modicum of independence.
 

A straightforward joint account may be a better solution

If a bank has a problem with a joint vulnerable adult/attorney account, the answer is to have a straightforward joint account with all correspondence etc going to the first name on the account – which is set up so that it is the attorney.  

I did start by adding my name as Attorney to my relative’s account, but such an account caused problems, especially over the issuing of cheque books.

After complaining up to the CE dept and receiving compensation for the bank’s incompetence, I changed the account to a straightforward joint account, and later opened a second joint account primarily for my relative to use. I now operate two joint accounts – the main account and the £100 per week account.
 

How easy was it recoup the losses from the bank account fraud?

 
Initially, the bank referred me to the small print of the account, under which they have the right to pass a cheque. This enabled me to point out the law says small print has to be reasonable, and in the case of an account set up for a vulnerable adult, the court would rule in my favour.

Once they accepted that they knew the account was for a vulnerable adult, they gave in, apologised in writing and told me about the service alert, admitting it was not publicised.

I told them it should be – and the bank concerned now has a Specialist Support team …but you have to ask for it! 
 

Article ends – click to return to top or check out related resources below

Further reading and resources

An update on text-based scams and how to avoid them

A new dementia-friendly debit card has been launched

We have an area of Independent Living dedicated to caring for people with dementia and other cognitive impairments

We have an interesting guest blog written by academic and campaigner, Peter Mittler, about human rights and dementia

What are banks doing about making services more accessible generally?

 
return to top