The Financial Conduct Authority has told banks and building societies to improve their handling of power of attorney.
On Friday the City watchdog set out examples of good and poor practice following a probe of bereavement and power of attorney policies, focusing in particular on vulnerable customers. Emad Aladhal, the FCA's director of retail banking, said: ‘Dealing with a bereavement or setting up a power of attorney can often be stressful and emotional. When banks and building societies get it right for their customers they can make a real difference at a difficult time. But when they fail to recognise and respond to customers who need more help, it adds to the stress. All firms should consider where they can make improvements.’
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According to the report, organisations have clear vulnerable customer policies and procedures that set out the expected timeframe for staff to process the registration of power of attorney cases. However, the FCA saw evidence of staff being unclear about what actions to take in the event of an emergency, such as when the customer’s capacity suddenly changed.
The FCA encouraged organisations to design 'customer journeys' with people in vulnerable circumstances in mind, noting as an example of good practice a dedicated phoneline that one organisation had set up for power of attorney queries.
A 'common issue' was customers involved in power of attorney processes often having to repeat information when speaking to different staff, or their cases delayed or dropped altogether because they had been ‘lost’ in the firm’s IT systems. ‘We encourage firms to focus on ensuring customer journeys are fit for purpose across legal entities, to reduce the risk that consumers do not get their needs met or must repeat information unnecessarily,’ the report says.
Most firms had a limited range of channels available for attorneys to access the account of the relevant customer. In particular, app-based banking or online banking were often unavailable. 'This limitation often appeared to be due to the firm’s investment decisions, suggesting access could be expanded if resource was committed to it.'
Banks and building societies are likely to find themselves dealing with many more LPAs: the Office of the Public Guardian received a record 1,370,546 LPA applications in the 2023-24 financial year. The backlog of LPA applications reached 288,100 in August 2023, which the OPG halved by the end of March 2024.
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