Protecting Against Fraud and Financial Abuse
Seniors can fall victim to criminal activity by strangers and sometimes even family
Seniors put a tremendous amount of effort into building and maintaining a financially stable retirement and are often generous with their loved ones and their communities. Unfortunately, these endearing and respectable qualities are the same qualities that make them a target.
The Canadian Department of Justice released a 2013 report about the seriousness of crime and abuse against seniors, and it points to financial crime as a principal area of concern.
Financial crime against seniors falls into two categories: fraud and financial abuse. Fraud against seniors usually involves a stranger taking advantage of a senior citizen, but financial abuse often involves somebody known to the victim (ie – a family member, caregiver, or neighbour/friend).
Consolidated Credit has laid out some of the typical forms of fraud and financial abuse, as well as ways that seniors can defend themselves.
Common forms of fraud against seniors
The Romance Scam. In this case, criminals take advantage of seniors who may have recently lost a spouse and are using online dating sites or social networks to find companionship. The fraudster will typically build a romantic relationship with the victim over time, earn their trust, then ask for money to help with a family or health emergency. They might also claim to live far away and ask for money to help pay for an airplane ticket.
- Tips for prevention: Be extremely scrupulous with anyone who is trying to strike up an online relationship. Try copying information from their profile and pasting it into a search engine to see if the profile is copied. Ask specifics about some of the things they list on their profile – you can bring up Google maps and ask them about a specific restaurant in their city. But the best advice is simple: If they ask for money, cut off communication and report them; it is an obvious red flag.
The Grandparent Scam. This scam preys on the trust and love of a grandparent for their grandchildren. It involves a criminal calling a senior by phone and claiming to be their grandchild. They typically present an urgent situation, like a car accident or an emergency in another country, and request that money be wired immediately. They will use verbal tricks to gain trust, such as not using specific names, and waiting for the grandparent to feed them information that they can use (“Eric, is that you?” “Yes, it’s me, Eric!”). They may call in the middle of the night in the hopes that a recently awoken victim will not be able to think clearly.
- Tips for prevention: Don’t worry about offending the grandchild by asking a few questions. If money is involved, you want to be absolutely clear about the person on the other end of the phone. Ask specific questions that are hard to fake, like a pet’s name, or a sibling. Never give your credit card information over the phone.
Phishing and Vishing. This scam affects all age groups but can especially target seniors due to their unfamiliarity with the internet. “Phishing” is when criminals use websites and e-mails that look like legitimate websites and request that you enter personal information. This may take the form of a bank website or phone company. “Vishing” (voice-phishing) works on the same principal but uses phone calls to solicit important personal information. The criminal may point out that your “account” needs to be “urgently updated” and will request private financial information.
- Tips for prevention: Only use websites that you are sure are legitimate. Look for security features like a URL beginning with “HTTPS” instead of “HTTP”, or look for a padlock or other icon next to the URL that indicates security. Never give out financial information on the phone unless you initiate the call.
Common forms of financial abuse against seniors
Power of Attorney (POA). This is a legal document that gives another person the authority to handle your financial matters on your behalf. Sometimes family members use it to benefit themselves, and not the primary owner of the account.
- Preventing abuse: Choose your POA extremely carefully. You can assign two POAs as a matter of check-and-balance. You can always revoke an existing POA if you feel they are not working in the way you intended.
Joint bank accounts. A joint bank account can be useful if you need help paying your bills or managing your money in the event that you are unable to do so yourself. But you need to be aware that you have given full access to someone else and an untrustworthy person could use the account for their own benefit.
- Preventing abuse: If the purpose of your joint account is to help you pay bills, you could create a separate account designed specifically for bill payment. When this becomes a joint account, your primary funds are still protected.
Forgery/pressure to sign. In some cases, someone may use extreme pressure or even threats to coerce you into signing financial or legal documents. Forgery is also used in order to gain access to your money and assets.
- Preventing abuse: In a threatening moment, it might be impossible or dangerous to try to resist pressure to sign a document. If this occurs, immediately contact your bank or relevant institution to freeze accounts. Also, keep an eye on your bills and statements to see if any irregular activity is occurring, which may indicate your signature has been forged.
In all cases of personal finance, it’s important that Canadians are diligent in protecting themselves and their assets against untrustworthy people. Sadly, some people will use a false sense of trust in order to take advantage of seniors.
If you think you have been the victim of fraud, contact the police, your bank, and the Canadian Anti-Fraud Centre at 1-888-495-8501. If fraud or other mismanagement has left your finances in peril, it might be a good idea to speak to a trained credit counsellor to learn what your best course of action is. Call us at for more information.