Combating the Rising Threat of Financial Fraud for Older Adults
*This post is from CMB partner Finuity Wealth. Find out about group benefit solutions here.
In 2021 alone, 67,815 Canadians fell victim to financial fraud, losing more than $380 million, according to the Canadian Anti-Fraud Center. Disturbingly, fraud stands as the No. 1 crime against older Canadians.
This issue isn’t isolated to Canada. That same year, the Federal Bureau of Investigation (FBI) in the U.S. noted that 92,371 older individuals were defrauded, culminating in $1.7 billion in losses—a 74% spike compared to 2020.
Understanding the nature of these scams, the reasons seniors are often targeted, and the preventive measures we can take is paramount. Equipping older adults with this knowledge empowers them and is instrumental in protecting their assets and well-being.
Why are seniors the prime target for financial scams?
Fraudsters and con artists predominantly target older adults, assuming this demographic possesses substantial savings. Many financial scams go unreported or become challenging to prosecute, making them a perceived “low-risk” crime by perpetrators. Yet, these scams can be financially ruinous for seniors with limited avenues for recouping losses.
Top Financial Scams Affecting Seniors:
Government Impersonation Scams: In these scams, fraudsters masquerade as representatives from government agencies. They might intimidate the victim about unpaid taxes, threatening arrest or deportation. Alternatively, they may falsely claim a need for personal identification details under the guise of potential benefit cuts. These scammers often demand immediate payment through prepaid debit cards, cash, or wire transfers.
Sweepstakes and Lottery Scams: Scammers tell seniors they’ve won a lottery or some other prize. However, to claim this “prize,” they must pay supposed taxes and processing fees upfront. These scams can be particularly insidious, with fraudsters sometimes convincing their victims to part with even more money over extended periods.
Robocalls and Phone Scams: Using advanced technology, scammers can place automated calls to many households. The content varies, from warning about expiring warranties to the notorious “Can you hear me?” tactic, where the scammer records the victim’s voice to authorize unwanted charges on stolen credit cards.
Computer Tech Support Scams: Leveraging many seniors’ unfamiliarity with tech, scammers may send pop-up warnings about computer issues. When contacted for “support,” they either demand a fee or request remote computer access. In 2021, losses from such scams reached nearly $238 million.
The Grandparent Scam: Here, emotions become the scammer’s tool. A call to an unsuspecting grandparent might start with, “Hi, Grandma, do you know who this is?” Once trust is established, they weave a tale of urgent financial need, convincing the senior to part with money quickly.
Recognizing these scams is the first step, but how do we actively prevent our loved ones from becoming victims?
Preventive Measures: Safeguarding Elderly Loved Ones
In the face of such staggering statistics and the growing threat of financial fraud, one might wonder, “How can we protect our elderly loved ones from these perils?” Here is a set of comprehensive measures:
Educate Them on Common Scams: Awareness is the cornerstone of prevention. Regularly update them about the latest scams and teach them to recognize suspicious patterns. An old adage remains true: if something seems too good to be true, it most likely is. Impress upon them that genuine institutions or ‘official’ sources will never ask for immediate payments, especially not through unconventional methods like Bitcoin or gift cards.
Stress the Importance of Privacy: Personal information should be guarded zealously. Advise elderly loved ones never to share details like their Social Insurance Number, bank credentials, or other confidential data over phone calls or emails. Highlight the risks of oversharing on social media platforms, as crafty scammers can weaponize this information to craft compelling schemes.
Robust Digital Hygiene: As the digital age advances, so does the sophistication of online scams. Advocate for the use of strong, unique passwords for each online account. Ensure their devices are armed with the latest antivirus software and caution them about the dangers lurking behind unsolicited pop-ups or unfamiliar email attachments. It’s equally vital to acquaint them with common signs of phishing attempts, such as glaring grammatical errors or questionable email addresses.
Monitor Financial Statements: Regular oversight of bank accounts and credit card statements can be an early warning against unauthorized activities. Any unusual or unrecognized transaction should be flagged and reported immediately.
Establish a Trusted Contact: Building a safety net is crucial. Encourage them to designate a trusted individual—a family member or a close friend—they can consult when confronted with dubious financial decisions or if they feel unduly pressured into parting with their money.
Reporting is Essential: Emphasize the crucial role reporting plays in this battle against fraud. Should they even suspect they’ve been on the receiving end of a scam, or worse, fallen prey to one, immediate action is required. Reach out to local law enforcement, notify their bank, and use the robust reporting system offered by the Canadian Anti-Fraud Center. Not only does this help in possibly recuperating lost assets, but it also aids authorities in zeroing in on the perpetrators.
By adhering to these preventive measures and fostering a culture of open communication and education, we can substantially mitigate the risks of financial fraud against our most vulnerable population.
Awareness and proactive measures are our best defence against financial predators. Let’s work together, arm our elderly with the knowledge they need, and put an end to this growing threat.