Financial Abuse Online

Financial abuse is one of the most upsetting crimes. It can happen to anyone of any age and the perpetrator could be a loved one or a close friend or a complete stranger. 

There is an extra layer of financial abuse taking place online and with technology, fraudsters can hack onto people’s computer devices and smart phones to monitor their online activity. Financial abuse online could be persuading someone to transfer money to another person often after developing a relationship and an emotional connection under false pretences. There can be undue influence, pressure and guilt if the person does not give their money. Financial abuse also includes grooming, where an effort is made to build a trusting relationship with the person through regular contact to convince the person that there is a friendship or romantic interest or pursing a charitable initiative.  

Whilst online financial abuse can target people of any age, people who are vulnerable due to learning disabilities, their health, age and/or loneliness, can be at greater risk and it can be heart breaking to see the consequences of financial abuse. Further, the person in question is likely to feel that they are giving money to a ‘friend’ and often do not want to listen to others who warn against continuing to give away their money. This in turn can lead to a reluctance to reporting the incidents to police as the person does not see what is happening to them as a crime. People can give away the majority of their money and even take out loans to give more money as a result of online financial abuse. 

Under the Mental Capacity Act 2005, capacity is decision or task specific and depends on whether or not:

1. a person has an impairment of their mind or brain; and

2. that impairment means they are unable to make a specific decision. 

This includes understanding information relevant to the decision in question, retaining that information and using or weighing up that information to reach a decision. If a person is unable to do any of these, they are deemed to lack the mental capacity to make the decision in question. 

If a person passes the capacity test and still continues to give away money to fraudsters, this unwise decision is still theirs to make. It can be really difficult to watch loved ones continue to give away their money even though they know a crime is being committed. 

What can be done to help?

Eradicating online financial abuse is not easy and each case should be considered on its own merits. However, there may be certain steps that could be taken to help vulnerable people:-

1. Communication is key – can it be communicated to the person that they are the victim of online financial abuse. Consider whether they are more receptive to information at certain times of the day if they have fluctuating capacity.
    
2. Ask the person to show how they know their money is being used. For example, if the online perpetrator needs the money for an operation or pretending to be carrying out a charitable purpose for example to open a school in another country, ask them for evidence that the money has been used in this way.
    
3. If the person in question has a financial attorney or a deputy, can their daily funds be limited in any way so that they can only spend / give away a smaller amount of money.
    
4. Look out for potential signs of financial abuse such as:
   • An unusual lifestyle or personality change, such as becoming withdrawn
   • Secretiveness about money
   • A sudden lack of money
   • A noticeably large amount of junk mail
   • An unusual number of phone calls or visits from strangers
   • A high number of goods being delivered that they don’t seem to need
   • Unnecessary work being carried out on their home 
   • A check on their physical health for example loss of weight because they are giving away money and not eating or drinking properly as have limited money for themselves
    
5. Help the person report financial abuse to the police and/or Action Fraud. You could also encourage the person to speak to someone, such as Victim Support, a charity that provides practical and emotional support for people affected by crime. 

There are now specialist companies that can assess whether or not someone has the mental capacity to use the Internet. They can also examine all devices used to determine whether any apps, programmes, email addresses, accounts, websites etc. are open to risk. This is all bespoke to the person in question and how they use their devices. 

Financial abuse often includes emotional abuse and neglect, including self-neglect. It is essential to recognise that the person may be unwilling to accept or be in denial that they are a victim of financial abuse. Therefore, it is vital to remain dynamic in your response to the person. For example, suppose you are a financial attorney or a deputy, and you decide to limit the amount they can spend. In that case, this may lead the person to spend less on themselves to meet their perceived financial obligations to the scammers/financial abusers. This can include only eating one meal a day (usually cheap junk food lacking in nutrients) or being unwilling to spend on self-maintenance and self-care. Further, the person could also find creative ways to send money to the scammers, such as regularly attending a local money transfer institution like Western Union. 

It is also important to remember that the person experiencing financial abuse could be experiencing feelings of shame, anger, embarrassment or fear of losing their independence and does not want to be considered incapable of managing their money or seen as vulnerable. In contrast, the person experiencing financial abuse may simply refuse to believe they are being abused. This can be difficult and frustrating for all involved, leading to a deterioration of familial and social relationships. However challenging as it may be, it is essential to remember that the person experiencing financial abuse is a victim of a sophisticated crime and is often emotionally involved. Therefore, remain supportive and patient and do not make fun of or ridicule them because how family, friends and organisations treat the victims directly impacts their mental health, which is already potentially vulnerable. 

Further Information

If you would like any further information or advice about the topic discussed in this blog, please contact Sameena Munir or a member of our Private Client team.

About the Author

Sameena Munir is a solicitor in the Private Client Department and had been with the team since 2015. Sameena has a Court of Protection focus, supporting property and financial affairs deputies. She works closely with clients who lack capacity, with a particular specialism of cerebral palsy and severe brain injury cases. She prepares statutory will and gift applications to the Court, and creates personal injury trusts. She also advises on lasting powers of attorney and probate matters.

Melissa Joseph joined Kingsley Napley in January 2019 as a Case Support Paralegal in the Regulatory Team before progressing to Head Case Support Paralegal in October 2019. In April 2020, Melissa was seconded to the Serious Case Team at the Health and Care Professions Council to assist the team with their backlog during the Covid-19 pandemic. Melissa was responsible for investigating and preparing the most serious concerns, such as sexual abuse cases. She also regularly carried out risk assessments on documents received throughout the investigation to determine whether an interim order was required to protect the public. In February 2021, Melissa was promoted to Senior Paralegal and resumed her role as Head Paralegal. Melissa is an active member of the firm's REACH and Social Mobility groups as well as both the Charities and Wellbeing Committees.