Responding to the financial abuse of older people - Loddon ...

Preface
In a paper given in November 2005 to the Banking and Financial Services Ombudsman
Annual Conference entitled Uncovering elder abuse: powers of attorney, administration
orders and other issues for banks, Julian Gardner, the then Public Advocate, Victoria,
highlighted the important role that banks can play in identifying and protecting their
customers against elder financial abuse. 1 Mr Gardner observed that banks and financial
services occupy a privileged position in the financial affairs of their customers and, as
had been recognised in other jurisdictions, ‘have the potential to be the ”first line” of
defence against abuse by identifying the abuse at its outset, before the elder’s assets have
been dissipated’. 2
In response to submissions of a similar nature made by Mr Gardner and others to the
2007 Commonwealth Parliamentary Inquiry into Older People and the Law, the House
of Representatives Legal and Constitutional Affairs Committee made the following
recommendation in its report Older people and the law:
Recommendation 5
The Committee recommends that the Australian Government work in cooperation
with the banking and financial sector to develop national, industry-wide protocols for
reporting alleged financial abuse and develop a training program to assist banking staff
to identify suspicious transactions. 3
In December 2007, the Banking and Financial Services Ombudsman issued BFSO
Bulletin 56: Financial abuse of the vulnerable older person in response to the expectations,
raised by the report Older people and the law, that the financial services industry could
do more to protect its older and vulnerable customers against potential loss. BSFO
Bulletin 56 deals not only with the nature and warning signs of financial abuse but also
with the principles relevant to determining the allocation of liability for the potential loss
and the development of national protocols and training programs for staff in identifying
and responding promptly to prevent loss.
If Recommendation 5 of Older people and the law is to be taken seriously, Australian
legislatures and the banking and financial sector will have to identify and overcome
significant challenges and constraints – practical, commercial and legal. For example,
what are the consequences for the bank if it intervenes and questions the customer’s
warrant because the transaction is out of the ordinary or there are signs that the
customer does not understand or has not agreed to the warrant What precisely is the
bank’s responsibility to intervene in the interests of its elderly and vulnerable customers
in such instances
In July 2007, a specialist Older Persons Legal Program of the Bendigo based Loddon
Campaspe Community Legal Centre developed a project brief to identify the challenges
and constraints faced by the banking and financial sector in responding to the financial
abuse of their older customers. The brief also aimed to research best practice standards
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