Power of Attorney - Loans/CC

Marker_2

Quick question. Can a donor get out loans, credit cards, payday loans etc if someone has power of attorney over their finances?

I have tried googling this but can only find stories of the POA fraudulently getting loans out for their donor.

dzug1

Legally the donor still has the right to run his own finances, get loans, credit cards, etc

Whether in reality finance companies are willing to cooperate is another matter and I don't know the answer. If they don't know there's a power of attorney in place then I don't see what there is to stop it happening.

jonesMUFCforever

I would very much doubt it - a donor has to act in the best interests - taking out a loan of somebody who cannot deal with their own finances does not look fair to me - but it does sound like somebody taking advantage of somebody who can't answer back.

the_insider

jonesMUFCforever wrote: »

I would very much doubt it - a donor has to act in the best interests - taking out a loan of somebody who cannot deal with their own finances does not look fair to me - but it does sound like somebody taking advantage of somebody who can't answer back.

The donor is the person that's granted POA.
It all depends on how the attorney was set up. You'd have to check the document.

dzug1

A Power of Attorney may limit what the Attorney can do, but I've never heard of one limiting what the donor can do.

Indeed it can cause nasty problems if the donor thinks he can cope but can't.

patanne

Unless a POA once used is shown on a credit report (anyone know if it does show) & provided the loan/cc is not requested from a bank where the POA HAS been registered, then I can see nothing that would be able to stop a loan being granted as the lender would have no knowledge of the POA. Oh dear! Not a happy thought!

poppasmurf_bewdley

When my late Mother was beginning to get very frail, my brother and I got Power of Attorney over her affairs. We BOTH had to agree anything that we did - we couldn't each just go our own way on anything, although each of us had access to things like bank accounts.

This was drawn up by the family solicitor and only cost £100 all in to set up. Something I would advise people to do BEFORE they need it, not after.

patanne

I too hold a POA for my parent. This has been given to all the banks etc that she has had dealings with. However, despite her frailty, I can see nothing that would stop her from being able to raise a loan for herself, providing she can remember her name, address & DOB. Very unlikely now, but eighteen months ago quite a possibility, although she had already made a couple of bad financial decisions (fortunately very small ones) before then. This would then be up to me to sort out.

Marker_2

Thanks for your responses, not as favorable as I'd hoped The credit report element is interesting though, I will look into that.

Paul_the_Painter

As the person holding a POA for another, could you not add a note on their file with all 3 credit reference agencies (as anyone is entitled to do on their own record) stating that "the subject of this record has a Power Of Attorney in place and any credit agreements need to be signed by xxxxxxx and/or yyyyyyy, and NOT by Mrs X, who does not have capacity"

the_insider

If the donor doesn't have capacity it might be worth approaching the office of public guardianship to have access removed. This would prevent the donor using the accounts at all but would stop applications.

Is there a reason you don't want the donor to administer her own accounts?