In its Six month report, AFCA observed that the high number of unauthorised transaction complaints shows that financial firms need to do more to ensure that they have appropriate systems in place to detect fraudulent transactions, including in relation to financial elder abuse.

AFCA says that in complaints it sees arising from alleged financial elder abuse, a common claim is that the financial firm and its employees should have recognised financial abuse was taking place and could have taken steps to prevent loss. It acknowledges that whether potential abuse was visible at the time and what could and should have been done are always difficult issues.

AFCA has published its Approach to financial elder abuse (practically identical to FOS’s Approach) to assist financial firms, consumers and consumer advocates to recognise the warning signs of financial elder abuse and to understand how it applies legal principles, industry codes and good industry practice when considering these types of complaints.

When AFCA considers complaints and issues of financial elder abuse are raised, it will ask:

• Were there red flags or warning signs which may have been indicators of financial abuse of a vulnerable elderly person?
• Did the financial firm exercise its duty to take reasonable care and skill, and question the customer’s authorisation of a transaction?
• If so, should the financial firm have delayed the transaction or taken other preventive action?

AFCA will consider all circumstances surrounding the financial transaction and whether the financial firm took appropriate action to determine if financial elder abuse was occurring.

What can financial firms do?
AFCA’s Approach refers to the Banking Code of Practice.

The 2019 Banking Code of Practice says that staff must “act with sensitivity, respect and compassion” towards older customers who appear to be in a vulnerable situation and refer them to external support, if appropriate, whilst being respectful of their need for confidentiality.

AFCA also refers to ABA Industry Guideline – Financial Abuse and Family and Domestic Violence as an example of good industry practice.

AFCA expects a financial firm to talk to the elderly person separately and in private about the financial transaction.

It says financial firm employees should escalate their concerns to the appropriate senior person before conducting the financial transaction.

It also says a financial firm may consider declining or delaying the transaction, for example by asking the customer to come back the next day if they still want to proceed.

AFCA does not have any other specific recommendations.

What if you still have concerns? In appropriate cases action might include a referral to the Police or the Office of the Public Guardian (or equivalent in each State).