'All got a part to play' in ending financial abuse

by Rebecca Pike19 Jun 2018

As the Australian Banking Association (ABA) kicks off its campaign to end elder financial abuse, one non-bank says “we’ve all got a part to play”.

The ABA has joined forces with National Seniors, the Council on the Ageing, the Older Persons Action Network and the Finance Sector Union to head up a drive for change.

The campaign hopes for change to allow bank staff to properly detect and safely report elder financial abuse. Currently there is no one place in Australia for staff to report suspected abuse.

In February, Australia’s banks renewed their push for change and called on the federal, state and territory governments to have key policy changes decided by Christmas.

These changes are: standardised Power of Attorney orders across state and territories, an online register of Power of Attorney Orders, and a designated safe place for local bank staff and members of the public to report suspected abuse.

Brokers are well positioned to spot financial abuse, particularly when it comes to dealing with reverse mortgages.

Pensioners are able to take out funds against their property for a number of reasons, including holidays, living expenses or just as a buffer to live comfortably.

But Heartland Seniors Finance has encouraged its staff to look carefully for ‘red flags’ and make sure these requests add up.

CEO Andrew Ford said the bank has seen many examples of elderly people trying to take out loans after falling for offshore scams.

While the company is not a member of the ABA it strongly supports what the association is campaigning for, in particular providing that clear place to go when there are concerns.

Ford added, “We’ve got a really strong duty of care for our customers that goes beyond regulatory requirement to make sure that we’re doing everything we can to detect and prevent elder financial abuse.

“Brokers need to make sure they’re playing their part and look out for anything unusual or anything that indicates potential financial abuse. For us it involves taking extra care when there’s a power of attorney involved or if doing a reverse mortgage and there’s gifting involved.

“Look out for those potential red flags. If they are there then I would recommend talking to the customer and trying to get them alone, or that’s probably a chance to talk to the Australian Banking Association about what they should do there.

“If a broker becomes aware of something, we recommend they talk to an elder financial abuse hotline in each state.

“It’s about the behaviour. Some of it comes down to the purpose of what they’re looking to borrow for and then also the behaviour of the applicant or a family member.

“Really it comes down to that and the broker using their experience and intuition to say, does this add up? If it doesn’t, as what we’re required to do under our duty of care and under our regulatory environment, is to make reasonable enquiries to verify those.”

 

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COMMENTS

  • by Broker 19/06/2018 8:12:10 AM

    Recently had a lender ask for an exit strategy for a 45 year old, age discrimination is also financial abuse.

  • by Peter Stewart 19/06/2018 4:43:19 PM

    No matter what lender conditions are in place for reverse mortgages, the first and primary safe-guard is face-to-face with the client.

    Accepting applications from brokers or direct, when no face-to-face has been made, will always allow some opportunity for financial abuse, even if there is a three minute compliance call or solicitor advice conducted.