Financial services – access all areas?

The Government has taken an important step forward in ensuring that financial services work for older people. It proposed an amendment to the Financial Services Act which, for the first time, gives the regulator a mandate not just to protect consumers, but also to ask whether consumers can access the products and services they need.

Age UK has been calling for the Financial Conduct Authority (FCA) to be given this ‘access mandate’.  We’ve been convinced of the need for the regulator to look at access because of what we hear from older people – we see many problems caused not just by dangerous products that consumers should be protected from but also because of the lack of products and services that are really accessible to older people.

200x160_moneyBarriers vary:  it could be direct age discrimination – being told you’re ‘too old’ for a mortgage, or credit card, or insurance.  Or it could be indirect, having to jump through so many hoops to find and obtain the right kind of insurance that you give up.   Often the design of services mean they just don’t work for large groups of older people – for example relying on text messages for updates and removing paper statements will make it harder for many older people to manage their money well, the reduction of the branch network and poorly designed telephone and online banking systems will make it almost impossible for others to manage independently at all.

Its very difficult to exist in today’s society without access to financial services – Government and employers want to make payments into accounts and utility and other providers want to be paid by direct debit.  Certain kinds of shopping, for example online, are impossible without access to some kind of payment service.  Yet all this demand has yet to be matched by improvements in supply.  Consumers still struggle and Government, local authorities and other bodies need to commission and pay for special services for those who can’t use mainstream banking.  This is why its important that, during debate on the Bill, the Government explicitly recognised that access to financial services is crucial and that effective competition is very much about access and affordability.

Even with this amendment, the FCA won’t be able to fix all these problems alone.  But Lord Newby made clear that the Government believes that the regulator does have a role in promoting access and helping the most vulnerable and as part of this it will look at whether the market is delivering the services different consumer groups need and where necessary make rules to improve the way the market functions.

Find out more about our policy work on consumer issues

Read consumer advice on the Age UK website 

Author: Lucy Malenczuk

Policy Adviser, Financial Services

One thought on “Financial services – access all areas?”

  1. A rapidly expanding group of victims for whom there appears to be little support are those who lose money through the actions of family members and others who may pretend to be helping the victim with their financial affairs but in so doing gain access to their bank accounts, debit cards, credits cards, pin numbers, passwords, etc. The victims are usually vulnerable adults, often elderly people with memory problems and onset of dementia. When this sort of crime is reported, there is very little anyone can do to help. The police and the Crown Prosecution Service are well aware that when questioned the suspect will state that the victim “said that they could operate the account”, “spend all their money in return for looking after them for the rest of their life”, etc., They know that the victim, especially those with dementia, will not be able to give the required evidence to a criminal court. Solicitors also realise that although the criteria are somewhat different in a civil court, the case will still be determined by the defendant’s word against a victim who is confused and might not even be able to remember that the events have taken place.

    I believe that the claim that the victim said that the suspect could have their money, use their bank account to their own ends, etc. should not be an admissible defence in court. In a case of assisted suicide, it is not an admissible defence that the victim, perhaps someone with a debilitating condition, asked the person to help them take their own life. Similarly, in cases of Health and Safety breaches, “I told them not to use that machine without a guard!” is not an admissible defence. It must be shown that the defendant made reasonable effort to prevent an accident. In cases where family members and others assist a vulnerable person, there should be a duty of care to ensure that their actions do not work again the interests of the vulnerable person. For example, if an elderly person, whether of sound mind or otherwise, is helped by a family member (say) to operate their bank account, only for the family member to operate the account later in an abusive or reckless manner, this should be a criminal offence irrespective of what might or might not have been said. If the elderly person says a family member can have their money, it should be a criminal offence if, for example, the family member takes every penny or even enough to reduce the elderly person to poverty. How is the elderly person expected to live? Will the State step in to support the elderly person even though they are only destitute because they gave their money away? My view is that the law should place the emphasis on the family member acting responsibly.
    As an example, my Mum sold her house to my sister, Jill, in May 2003 but she continued to live in the house with Jill and her partner (now husband). Not long afterwards, relations between Jill and other family members broke down and no one was able to visit Mum although they could pick her up at the door and take her to their homes, etc. The situation worsened in 2010 when Jill and her now husband bought another house and moved there with Mum. Although there were some instances where some family members raised some concerns, Mum seemed “ok” with the arrangement. In August 2012, however, Jill rang my other sister to say she needed a fortnight respite and and it was decided that Mum should stay with my brother. When she arrived, it was clear that she had dementia but also some physical problems that had not been treated. Following some weeks of argument with social services and Jill, it was decided that Mum should stay with my brother.
    Initially, we had none of her documents. It is incredibly difficult to get anywhere without birth certificate, marriage certificate, national insurance number, information about pensions, bank account details, etc. It has taken us four months of frustration but we now have bank statements. Unfortunately they show how all her money has been removed from her accounts. The £56,000 which Jill paid for her house was paid into a savings account with the Halifax Bank. In 2004, a current account was also opened with the Halifax Bank. Initially, her pension income (State pension and small spouse’s pension from Rank Xerox) was quite a bit greater than her outgoings. We assume that a standing order for £100 each week was paid to Jill for “bed and board” and there were the occasional withdrawls from a cash machine at the local supermarket. My other sister used to take her shopping and help her to use the cash machine. This stopped after a short while, however, following a fall out with Jill.
    The statements show that as time went on the frequency of withdrawls from cash machines increased (sometimes several times in a day) to such an extent that the balance in the current account fell close to zero. Transfers of £1000 each time from the savings account were used to top it up. Later on, the current account became overdrawn regularly and further transfers (often monthly) from the savings account took place. In addition to cash machine withdrawls, “Fast Transfers” to Jill and her son, Timothy, start to appears and increase in frequency and amount. The account started to be used “online” and a £1000 overdraft facility was also set up. The account was overdrawn for about a year just short of the overdraft limit and fees were being applied. The debit card was also used at supermarkets and other shopping outlets. This continued even after Mum had started to live with my brother until the day it was finally agreed that Mum would not return to live with Jill. By this time the savings account had a balance of £5 and the current account had a balance of £300 due to a payment into the account from Jill on that day.
    We have spoken to the police, our solicitor and the Alzheimer’s Society and all agree that due to the issues above there is very little that can be done. However, the pattern of spend is not that of an 80 year old women with dementia and not in her interest. The account has been operated in a reckless way and demonstrates why the law should also be changed to introduce a crime of financial negligence against those who abuse a vulnerable person in this way. Anyone helping a vulnerable person should be required by law to act in a responsibly. There are questions about how the bank has behaved as well. In addition to the pattern of spend, setting up an overdraft facility on the account of an elderly lady and allowing it to operate at the overdraft limit for such a time without asking questions seems very irresponsible, perhaps negligent. Throughout the time we have been trying to piece Mum’s life back together the bank has consistly used the fact that we do not have Power of Attorney as a way of stalling. Their fraud unit is aware of the issues but appears reluctant to fully investigate unless Mum goes into the branch and discusses the issues!
    The present laws do not protect the vulnerable, the victim but provide plenty of loop holes for the unscrupulous. We must change the law so that the victim is the main focus whilst placing a duty on others to act responsibly on their behalf.

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