- People with dementia “sitting ducks” for online and offline fraud
- Contactless payments liberating and empowering for people with dementia
- Action needed to make lasting power of attorneys easier for individuals and the industry
People with dementia report a litany of challenges when engaging with the financial services and payments industry, according to a new report Retail Therapy, published by the International Longevity Centre – UK (ILC) and supported by abrdn Financial Fairness Trust, last Thursday.
Researchers interviewed people with dementia and their carers, and organised focus groups and innovation workshops with business professionals. Interviewees raised a series of concerns about the way the financial services and payments industry engaged with people with dementia.
Some interviewees reported they did not feel the sector was trustworthy while others said they found it difficult to understand products and that customer-facing staff were not always well trained. Participants were keen that protections were put in place to ensure that people were not sold unnecessary products. They also felt it was vital the industry understood how dementia could lead to risky behaviour resulting in unwise investments. Too much choice, and a reluctance to accept support or admit vulnerability, were also issues of concern raised by research participants.
The report highlights that while carers are often looked upon to support people with dementia, many do not feel confident in managing money themselves and there is little support available to them. Carers report that bank closures are making access to information and support more difficult.
ILC found that lasting power of attorneys (LPAs) were vital to empower and support people with dementia and their families. But interviewees complained about the length of time to register an LPA, the cost, and a lack of information. There were concerns that the financial services industry didn’t always recognise multiple attorneys and that the sector could be “overly cautious”. Interviews with the financial services industry revealed that the lack of consistent practice on dealing with customers with an LPA was one of the main causes of ‘miscommunication’.
The report also finds significant issues facing people with dementia in terms of managing payments. People reported struggling to pay with cash and had concerns about remembering their Personal Identification Numbers (PIN). However, contactless payments were seen as liberating and empowering for people with dementia (although protections are needed for people with impulse control issues). While there is value in having contactless payment limits, some interviewees highlighted that it could create anxiety at the till when payment limits were exceeded and a PIN input was necessary. The report authors suggest prepaid or restricted cards could protect independence while avoiding the risk of overspending.
While ILC were keen to emphasise the importance of maintaining choice and independence, the report highlights that some people with dementia were “sitting ducks for financial abuse”. ILC researchers highlighted examples of people who had found themselves with subscriptions and direct debits which they may not have actually wanted to set up.
The report argues there is a need for innovation, for example, a hidden disabilities digital lanyard, to easily identify and support people with dementia.
ILC also call for:
- A review of legislation surrounding LPAs to consider whether procedures could be simplified
- Government and dementia experts to work together to identify effective ways to ‘nudge’ people towards setting up an LPA.
- Insurance companies and banking providers to work together to develop more consistent approaches and procedures for working with attorneys.
David Sinclair, Chief Executive of the International Longevity Centre, said:
“The financial services industry has made huge strides forward in how it supports people with dementia. But we have found a litany of issues which need to be considered by the industry and the regulator.
LPAs are great but too many people register them too late, both the industry and people with dementia think the process could be easier and more consistent.
We need to harness the potential of existing and emerging technology to make life easier for people with dementia and their carers. The financial services industry must use technology to deliver more and better products and services which meet the needs of people with dementia. At a simple level we need to ensure that technology, from payment cards to websites, are as easy to use and accessibly designed as possible.”
“ILC heard that for many people in the early stages of dementia, online shopping and contactless payments were often brilliant. The solutions aren’t just about utilising high-tech, or about changing laws. We need to all be nicer and more supportive of people around us who might take a bit longer to navigate around shops and make choices.”
Vivienne Jackson, Programme Manager at abrdn Financial Fairness Trust, said:
“People with dementia should be able to access financial services with the confidence that they will be protected and supported if things go wrong. This report calls for the financial services industry to do more to help this customer group. In doing so, they could make the sector safer and more trustworthy for everyone.”
Johnny Timpson OBE, Financial Inclusion Commissioner & Financial Services Consumer Panel member, said:
“My industry has to step up to the challenges highlighted in this report. Regulated firms need to appreciate that if they get it right for consumers living with dementia, they get it right for all vulnerable customers.
Under the new Conduct Authority Consumer Duty, all financial services firms and practitioners must act to deliver good outcomes for retail customers.
The FCA, and the new duty should also spur organisations to innovate to better identify vulnerable customers and securely fast-track their access to support by for example, developing a “Dementia and Vulnerable Customer Social Prescribing Partnership.
The pension midlife MOT offers an ideal opportunity to introduce consumers to benefits of having a Lasting Power of Attorney and why they are essential to pension and lifetime mortgage planning.”