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ombudsman news

issue 66

December 2007 / January 2008

ask ombudsman news

power of attorney

Have you been seeing more complaints about the way banks, insurers and financial advisers are dealing with powers of attorney since the Mental Capacity Act 2005 came into force on 1 October 2007-

a welfare officer at an older people's charity

The Mental Capacity Act 2005 brought the system of powers of attorney in England and Wales more in line with the system which has operated in Scotland since April 2001. Under the new system, the lasting power of attorney replaces the enduring power of attorney. Some of the more important changes are:

  • the document must include a statement of belief, signed by a witness, that the donor* understands the nature of the document;
  • it is possible to appoint different attorneys to carry out different acts on behalf of the donor; and
  • a lasting power of attorney is not effective until it is registered through the Office of the Public Guardian.

* [The "donor" is the person who gives someone else legal authority to conduct their legal or financial affairs]

Despite all these changes, and the possibility of confusion arising from them, we have not seen any real increase in complaints involving powers of attorney. That may be because we have never seen very many of these complaints in any event, although those we do see tend to raise unusual issues.

It's perhaps also worth pointing out that complaints often do not arise until some time after the power of attorney has been executed, so we would not necessarily expect to see any great change immediately.

bank charges

I'm dealing with a client at the moment who is unhappy with the way his bank dealt with his complaint about charges for an unauthorised overdraft. I've heard that you can't get involved with such cases at the moment. Could you please let me know what the position is.

the manager of a consumer advice agency emails ...

The Office of Fair Trading (OFT) is taking a "test case" to the High Court in order to get answers to important legal questions about the charges that banks make for unauthorised overdrafts. So we have decided to suspend our work on complaints involving such charges, while we wait to hear the outcome of the test case.

If he has not already done so, your client should let his bank know that he is unhappy with its response to his complaint. Banks are keeping such complaints on hold until they know the outcome of the test case. This may take some time, but banks should then deal with the complaints in line with what the High Court decides.

If, at that stage, your client remains unhappy with the bank's response, then he will be able to refer the matter to the ombudsman service. For more information about unauthorised overdraft charges, see our consumer factsheet.

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ombudsman news issue 66 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.