What constitutes the abuse of Power of Attorney

According to various sources of population report in UAE, about 90% of the people living in UAE are expatriates. These expats are mostly those who are employed while others run their business in UAE. It is very common for these expats to make power of attorney in Dubai and nominate a person they trust back in their homeland to perform and deal important matters such as financial decisions, financial and property transactions, health related issues or court cases on their behalf.

Types of Power of Attorney

There are two broad categories of power of attorney commonly used in UAE, a general power of attorney and special power of attorney. However, the sub categories further depend upon the spectrum of case, scenario and the kind of decision powers being transferred to the agent by the principal.

What does abuse of Power of Attorney mean?

Power of attorney is a very valuable document for both the principal and agent. Usually in power of attorney the principal authorizes person from family (sibling, parents, children or spouse), a trusted friend or a faithful employee to perform valuable decisions and transactions on his behalf.

However, these trusted people sometimes let greed and lust take over their faith and tend to misuse the authority. The misuse of authority occurs when they perform any transaction or make a decision that overrides the principal’s interest benefiting the agent only. This is known as abuse of power of attorney.

What are common types of abuse of power of attorney?

The abuse of power of attorney depends upon the horizon of rights given to the agent by the principal. In many cases, the principal limits the agent by allowing him to make financial decisions but not performing the transactions with their name. For example, if there is a buyer for a property owned by the principal, the agent may only deal with the selling matters but cannot perform the final transaction to sell it. It is always smart and wise to limit the rights of agent in the document with specified details to refrain from misuse of authority.

However, it seems to be very common that power of attorney still gets misused even by siblings and close relatives or friends and following are most common types of abuse of power of attorney:

• Financial Misuse
• Identity Forgery
• Medical Abuse
• Breach of responsibilities of Agent

Financial Misuse –This is the most common type of abuse in power of attorney cases. This happens when the agent starts performing financial transactions or invests principal’s money without principal’s knowledge or consent and keeps the finances off the record.

Identity Forgery – Since power of attorney gives the agent an access to principal’s most sensitive details, identity credentials being one of the most important of them all, the agent sometimes misuse the credentials. These credentials are commonly forged to open bank accounts or issue credit cards under the principal’s name which the principal is unaware of.

Medical Abuse – The abuse in medical power of attorney may occur when the agent misuses the benefits of insurance by ordering nursing facilities and expensive tests unnecessarily under the principal’s name.

Breach of responsibilities of Agent – The core responsibility of an agent is to keep the principal in loop of all matters he handles on his behalf. It is the duty of agent to inform principal of all the financial standings and transactions he performs through the power of attorney. If an agent does not do so, it is considered as an abuse too.

How to counter abuse of power of attorney in Dubai?

The legal system protects the rights of principal in an event of abuse of power of attorney in UAE. Following are the legal solutions advised by UAE courts for an event of abuse of authority:

• The principal may file a lawsuit against agent to revoke the financial transactions done without principal’s knowledge.
• The principal may report for fraud of assets and finances.
• The principal may ask the court to monitor agent’s actions on behalf of the principal
• The principal may ask the court to demand a detailed accounting from the agent of principal’s expenditure.

Want to prepare a secured document of Power of Attorney in UAE?

Granting someone valuable rights on your behalf especially in the matters of finances or property is a deal of sheer trust. It is however very necessary to create a power of attorney document keeping the interest of the principal secured by all means. Whether you make a special or general power of attorney, it is best to assure that there is no room for authority’s misuse. Notary Public Dubai guarantees worthwhile legal services to its clients. If you wish to prepare a power of attorney in Dubai or any other emirate of UAE, call experts today.