An elderly woman was found wandering in the streets aimlessly in a schizophrenic state. She was later admitted into a home for the aged. Years later, it was discovered quite by accident that she owned a landed house. The house had been occupied by intruders.
The superintendent of the home asked a lawyer friend to help her. But instead of doing so, the lawyer cheated the old woman by selling her house for nearly a million dollars and pocketing almost half the proceeds.
This is not a fictitious account. It was published in the Singapore law reports last year. The unfortunate incident illustrates the point that elders and people with special needs are particularly vulnerable to financial abuse when they have valuable assets or stand to inherit substantial assets.
With lifespans getting longer, it is inevitable that many people will one day join those with special needs. After all, functional decline in old age is a common condition. By 2030, people over the age of 60 in Singapore are expected to make up 25 per cent of the total population.
Thus, it is important to always be thinking of ways to improve laws or develop schemes to prevent the abuse of those with special needs.
The time has come to seriously consider implementing some form of mandatory reporting of suspected abuse, including financial abuse. Such mandatory reporting ought to apply to professionals such as bankers, lawyers and real estate agents.
If these professionals had a mandatory obligation to make such reports, the relevant authorities could thwart schemes to cheat people with special needs of their property.
A common argument against implementing a mandatory reporting scheme is that it places obligations on busy professionals that are simply too onerous.
Ultimately, this objection is unconvincing. In Singapore and other major financial centres, there are already a myriad of laws and regulations imposing all sorts of obligations on professionals to report suspected transactions related to money laundering or terrorist activity.
A strong case can be made that it would be equally feasible to require such professionals to report suspected financial abuse of people with special needs. Mandatory reporting of elder abuse, including financial abuse, already exists in some states in America, and there is simply no evidence that the practice is unworkable.
A further objection to mandatory reporting is that it is difficult to define suspected financial abuse. Thus, it is impractical to insist on mandatory reporting.
This objection is also unconvincing. The banking industry has long been aware of cases of elder abuse, and various bodies have issued guidelines on ways to identify it.
Examples of red flags pointing to elder abuse include situations in which an elderly person is accompanied by a new acquaintance to make a large withdrawal, where an elder is seen being coerced into making transactions, and when an elder is not allowed to speak.
In other instances, an elder might look fearful or confused, instructions are given to the bank in the absence of the elder, or instructions are written by someone else and the elder merely signs the documents.
Then there are cases where the transactions do not appear to benefit the elder, where the elder does not comprehend the transaction, where the elder makes uncharacteristically large transactions, or where the elder creates a joint account with a stranger.
Even without legislative intervention, banks are already under a common law obligation to verify their client's instructions if the red flags described are present.
The authorities should go one step further and empower professionals to report suspected financial abuse of people with special needs to the relevant authorities.
If legislation is indeed enacted, the next question would be: Who should be in charge of receiving such reports?
Currently, there is an Adult Protection Team (APT) convened by several Family Service Centres such as Trans Family Services. The APT considers cases of elder abuse, including financial abuse. It is made up of volunteer professionals from fields such as geriatrics, psychiatry, psychology, occupational therapy, social work and law.
Unfortunately, the APT does not have any statutory powers.
Supported by the Ministry of Social and Family Development, it works with the police, public authorities and various voluntary welfare organisations to resolve issues of elder abuse.
It would be preferable to have a dedicated organisation in the form of an Adult Protection Services (APS) agency to look thoroughly into reports of abuse. The current scheme is far from satisfactory because the APT does not have any real "teeth".
A dedicated APS established by statute would be better equipped to deal with the inevitable increase in abuse arising from a rapidly ageing population.
The idea is not new. Two students from the School of Law at the Singapore Management University made a similar suggestion in their 2012 prize-winning entry to the Attorney-General's Chambers Law Reform Essay Competition.
At the time, Attorney-General Steven Chong praised the essay, saying: "The policymakers in the ministries might find them useful when they next undertake a review of the legislation."
Those with special needs depend on the goodwill of the people around them, such as family, friends, lawyers, social workers, bank managers, real estate agents and domestic helpers.
However, some of these people can behave in an unscrupulous manner and hatch schemes to cheat the vulnerable of their property.
As Singapore looks into strengthening the social safety net for vulnerable people, special attention should be paid to the need for laws on mandatory reporting of abuse and the establishment of a dedicated organisation to minimise cases of abuse.
Tang Hang Wu
The writer is a professor and director of the Centre for Cross-Border Commercial Law in Asia at the School of Law, Singapore Management University.
This article was first published on June 23, 2014.
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