Parliamentary group publishes 'fraud and theft within families' report

The report cited evidence suggesting that a significant amount of financial abuse is inflicted by family members. There is a lack of awareness and research about this issue that the report addresses.

"We appear to have overlooked the scale and impact of fraud and theft within families", said professor Keith Brown, member of the Financial Vulnerability Taskforce and chair of the Safeguarding Adult National Network. "It is time to address the ‘elephant in the room'."

The groups said the issue of fraud and theft within families has to be highlighted to make understanding easier when it comes to its scale, type and impact. This, they added, would help the financial advice profession in providing more effective advice, support and measures to prevent this type of crime.

Keith Richards, chair of the Financial Vulnerability Taskforce and former Personal Finance Society chief executive, said professional advisers are recognising an increasing occurrence of financial pressure being placed on clients with accumulated wealth by family members, which was particularly evident during the early stages of pension freedoms.

"Without knowing what the national picture is however, we can only guess at the extent of the problem in our society, and the cost to us all, he said. "Being alert and recognising a potential issue is important but what an adviser does about it can be critical, so we are also underlining the need to collect and share examples of innovative and good practice currently being used to tackle this issue."

Craig Tracey, MP and chair of the APPG on Insurance and Financial Services, said financial crime within families is also a safeguarding issue with a massive impact on wellbeing.

Protecting the vulnerable

Tracy Evans, Chartered financial planner at Progeny, said the new report also raises some important issues about the wider definition of vulnerability.

In terms of vulnerability itself, it recognises the important distinction of vulnerable circumstances, which are often triggered by life transitions such as bereavement, divorce and even the menopause for women and ties into the FCA's updated guidance on supporting vulnerable customers, she said.

A big part of the problem is that money is often the last taboo within families and people therefore avoid openly discussing financial issues, especially in relation to what they want to happen when they have reduced capacity, according to Evans.

"This makes it much easier for people to fall victim to theft and fraud within their family, as without express wishes being defined, some family members can see this as a right to use these funds however they see fit."

"Not enough is currently being done to protect the financially vulnerable in our society," Evans continued. "It's possible for vulnerable people to fall prey to a wide spectrum of financial abuse and I welcome the focus that the Financial Vulnerability Taskforce aims to bring to this issue."