A secret court is controlling £2billion of assets of thousands of elderly and mentally impaired people and paying them a paltry rate of interest.
The controversial actions of the Court of Protection were criticised by an MP last night as ‘bordering on malpractice’.
The interest rate – currently much less than they would receive in an ordinary bank account – means that the value of the financial estates are falling rapidly because the rate of inflation is 2.8 per cent.
An investigation by the Daily Mail has uncovered a litany of other complaints about the court, which came under fire last week after it emerged it had jailed a woman for defying its orders over the fate of her elderly father in a care home.
The allegations include claims that:
The court’s officials frittered away people’s money by charging exorbitant fees;
Officials have raided homes in search of documents and read private emails;
The billions controlled by the court are being used to offset the national debt through an arm of the Treasury.
The court sits in private and deals with up to 23,000 cases a year.
It was set up in 2007 by Labour to act in the interests of those deemed incapable of running their own financial affairs because of ill health or old age.
It takes over when an individual suffers sudden mental impairment and has not already handed over power of attorney to a trusted friend or relative.
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It now controls huge sums of money for 16,000 vulnerable people.
The money is not at any risk.
However, many families say the low interest rate – equivalent to the Bank of England base rate of 0.5 per cent – produces an income that it is impossible for their loved ones to live on.
Lib Dem MP John Hemming said: ‘The money should be well-managed and pay a decent rate of interest or it borders on malpractice.
'The current rate is risible and losing these 16,000 people, who desperately need a proper income, tens of millions of pounds a year in total.’
The Ministry of Justice said: ‘These accounts are designed to protect funds awarded by the courts with a 100 per cent government-backed guarantee and at zero risk to the individual.
'These are not supposed to be an investment fund.’
Last year Wanda Maddocks, 50, was jailed for moving her father John from a care home against the instructions of the court.
She was held to be in contempt and served six weeks of a five-month term.