Casting a light on elder financial abuse on World Elder Abuse Awareness Day

Supported By:

Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

June 15, 2020 – Elder abuse is a serious and growing problem. June 15 is the ‘World Elder Abuse Awareness Day’, which provides an opportunity for communities to promote a better understanding of the abuse and threats that older persons are facing by raising awareness of the processes affecting elder abuse. Since elder abuse operates in the shadows, people close to the seniors in the community need to step up to protect them from becoming victims of financial exploitation.

In general, elder abuse can be psychological, emotional, sexual, physical, and financial. However, the latter is the most common form. The Ontario Provincial Police (OPP) reported that it is estimated that six to 10 percent of seniors aged 65 and over residing in Ontario are abused. Abuse can occur anywhere, including in their own home, the home of the caregiver, a long-term care home, a retirement home, an assisted living facility, or a hospital.

The World Elder Abuse Awareness Day is particularly important this year because the pandemic has forced many seniors to become more isolated, which is one of the key risk factors for experiencing financial abuse, according to the British Columbia Securities Commission (BCSC).

Elder financial abuse is defined as the unlawful or unauthorized use of an older person’s finances. It is also the act of pressuring an older person to authorize consent or use of their financial assets.

Elder financial abuse

The growing incidents of scams involving seniors are putting many at risk, threatening to strip them of their assets, their confidence, and their safety. People subjected to abuse are often fearful, humiliated, or ashamed, which is why they are less likely to report the incident. A financial loss can even affect an older adult’s health or cause a person to withdraw from friends and family.

Elder financial abuse is not always easy to recognize. The abovementioned factors are the reasons why it often remains unreported until a large portion of an older person’s savings are gone. The BCSC describes five common warning signs for elder financial abuse. First, unusual financial transactions, such as bank withdrawals or the liquidation of investments is a red flag for financial exploitation. Second, the sudden inability to pay bills, and third, when they are no longer buying things they need such as clothes, groceries, or medications. The fourth warning sign is when they assume financial responsibility for a family member, or fifth, if they suddenly change their feelings about a particular person such as unusual fear.

The perpetrators are commonly found among the people closest to older adults including family members, caregivers, and friends. However, strangers also pose a danger as they work to gain the trust of an older adult through offering help, financial advice, or friendship. Then, they use their new position to access the older person’s finances. This technique, which preys on the effect that people let down their guard with people they know and trust, is called the trust trap.

However, personal relationships are often at the core of elder financial abuse in the form of investment fraud, theft of money, credit or bank cards, or other possessions, attempting to take over an older person’s financial affairs including their investment portfolio, threatening or pressuring an older person to give money, attempting or actually persuading, tricking, or threatening the older person to make changes to their will or power of attorney, or misuse of a power of attorney by doing things that are not in the best interests of the older person.

One-third of Albertans 55+ believe they have been approached with potential fraud through someone they know

The Alberta Securities Commission (ASC) reported about a recent study of senior investors in Alberta in connection with a senior outreach campaign. The study data on financial abuse and fraud showed that one-third of Albertans 55 years or older believe they have been approached with a potential fraud through someone they know such as a friend, neighbor, co-worker, family member, or someone from a club, group or organization they belong to. 22 percent of the respondents believe they have been approached with a fraudulent investment via phone calls and 23 percent via email spam.

‘These findings are concerning considering the impact of the COVID-19 pandemic on Albertans, especially our seniors who are isolated or cut off from support groups,’ said Hilary McMeekin, Director of Communications and Investor Education at the ASC. ‘Scam artists exploit the fear, uncertainty and vulnerability that comes from volatility in the markets, the potential for lost retirement savings and social isolation.’

Furthermore, the Commission found out that over 70 percent feel confident in protecting themselves from investment fraud, however, more than one in five acknowledge they have signed investment documents without fully understanding what they mean.

The purpose of the ASC’s campaign is to help improve seniors’ financial knowledge, empower them to make wise investment decisions, and be aware of the signs and symptoms of financial abuse and fraud, including COVID-19-related scams.

Additionally, to ensure the safety of seniors, it is important to talk with elder loved ones about finances and watch out for the signs of elder abuse.

Recent examples of financial elder abuse

In January of this year, the Manitoba Securities Commission (MSC) laid numerous charges against Manitoba mortgage broker, Bret Allan Dobbin, in connection with financial elder abuse. He is facing 18 counts in violation of The Securities Act and 36 counts in violation of The Mortgage Brokers Act over his dealings with a Winnipeg widow in her 80s. He allegedly defrauded her out of $534,237 between April 2016 and June 2017.

Another case occurred in the context of the recent pandemic. Throughout Canada, thousands of seniors were lured into applying for the CERB without qualifying for it. Fraudsters are contacting senior residents offering a service to sign the seniors up for an undisclosed government benefit in exchange for a ten percent fee. The targeted seniors are mostly unaware that the advertised benefit was the CERB and that they likely do not qualify for the government funds. Cynically, the seniors who signed up for the CERB with the bogus service will have to pay back the received benefit to the federal government, and additionally lost the hundreds of dollars in fees they were convinced to pay. Furthermore, they disclosed personal information to the dubious service such as their social insurance number and their date of birth, which leaves them at risk of identity theft and fraud.

On June 15, the Thunder Bay police charged a Calgary woman for suspected elder financial abuse, according to a press release. According to the police, the woman, who is a member of the victim’s family, is accused of defrauding the 82-year-old out of about $102,000 over five months.

Learn to reject elder financial abuse

Prevention of elder financial abuse is crucial since fraudsters will discourage their victims to report abuse or suspect incidents. Additionally, the current measures to contain the spread of COVID-19 make seniors even more vulnerable to becoming victims of financial abuse due to increased isolation.

The provincial regulators recommend Canadians to build an understanding of elder financial abuse and learn to reject and prevent it from happening to them and/or someone they know. They especially advise people to keep track of their finances by reviewing bank and investment statements regularly, to stay informed about financial matters, and to understand how fraudsters, even if they belong to the victim’s family, target seniors and community organizations.

Moreover, senior investors are encouraged to investigate an opportunity or sales pitch, as well as the person promoting it, before handing over their money. Lastly, seniors are advised to get help if someone pressures them to invest or asks to access their investment or bank accounts.