Fraud Prevention Month: How to spot the signs of financial elder abuse

Many individuals living in Canada have received phone calls or emails from scammers claiming to be a government or bank official looking for personal or financial information. Some of these communications threaten consequences such as legal action or financial loss if there’s no response or if information isn’t provided such as a social insurance number.

While many of these calls and emails are clearly scams, some can be difficult to identify as fraudsters become more sophisticated and more people do their shopping, banking and government services online. The COVID-19 pandemic has also been a catalyst for a number of new scams, where fraudsters attempt to imitate government services to gain access to personal and financial information.

The CAFC says recent scams include:

-fraudsters claiming to be from a charity looking for donations to fight the pandemic

-victims who have had their money or personal identification stolen

-extortion emails where victims are told their computer has been hacked

-fraudsters claiming to be friends who have COVID‐19 and need money for medical assistance

Many fraudsters prey on the most vulnerable, in particular seniors who may be more trusting and not as savvy with technology or what might not be a legitimate request. In fact, financial abuse is the most common form in Canada. Many seniors know and trust the person mistreating them, such as a child, friend or caregiver, and don’t seek help due to a sense of loyalty or dependency on them. The instances of financial elder abuse are expected to increase in Canada as the Baby Boomer population ages.

March is Fraud Prevention Month in Canada, which is a good time to remember the threats that can be both financially and emotionally devastating for victims and their families. Here we look at some of the different types of abuse that can affect seniors and how to spot and prevent them:

How to spot financial elder abuse

The Canadian government describes financial abuse as the illegal or unauthorized use of someone else’s money or property either directly or by pressuring them into providing it. Examples include taking money from an account without permission, making purchases with the victim’s credit cards without their consent or forcing them to sign legal or financial documents they may not understand.

“There’s a wide range of what can be considered financial elder abuse,” says Jag Gandhi, vice-president, wealth planning at Gluskin Sheff.

The abuse usually happens gradually over time, which can make it difficult to spot until it’s too late.

“It’s often when a senior is dependent on a person, either for assistance, companionship or for health reasons; that person takes advantage of that dependency,” Gandhi says.

For instance, in her many years as a trust and estate lawyer, Gandhi has come across instances where a caregiver was authorized to withdraw money from a senior’s account each month and took a few hundred extra dollars for himself each time. She has also come across a few “grey marriages” (people getting married in their 70s and 80s), where one spouse has taken financial advantage of the other because they have more assets.

Gandhi says it’s not always a clear line between wanting to help another person and what’s considered abuse. Red flags can be changes in social or financial behaviour, such as suddenly taking trips or overspending on consumer goods and services, which may also happen if they have a new person in their life, such as a friend or caregiver.

“Trying to recognize and identify whether abuse is happening is important,” Gandhi says.

Preventing financial elder abuse

The best way to prevent financial abuse is through knowledge and education about what threats are out there, says Tiffany Harding, vice-president and head of Wealth Planning at Gluskin Sheff.

“People shouldn’t be afraid or ashamed to ask if something might be a scam, or if they think they’ve been a victim,” says Harding, who is also a past board director for Elder Abuse Prevention Ontario.

She also recommends people have the proper documents in place, such as a power of attorney (POA)  for property to protect their assets. This legal document gives a person(s)–known as the attorney (who doesn’t need to be a lawyer)–the authority to manage your money and property on your behalf.

An enduring or continuing POA for property allows the attorney to act for you if you become mentally incapable of managing your finances and property. A POA for personal care which allows an attorney to make health care decisions on your behalf can also include health directives (also known as an advance directive or living will) that express your wishes with respect to treatment when seriously ill and can’t communicate your wishes on your own.

If there are no specifics or limits cited in the POA for property, the attorney can act on behalf of the individual and manage their financial affairs. However, the attorney does not become the owner of an individual’s assets, only manages them, and they can’t make or change a person’s will.

The attorney has a responsibility to act in the best interests of the person who has legally appointed them. However, there is also a risk of financial abuse, Gandhi says, which is why she strongly recommends choosing a person you trust to be the attorney.

“Will this person take care of you when you can’t take care of yourself?” she asks. “They have a fiduciary obligation. Are they going to live up to their duties? The document is only as good as the person you appoint.”

How professional advisors can help spot financial elder abuse

Many advisors make it part of their practice to watch out for signs of financial abuse and protect their clients as much as possible, especially for seniors. Advisors are in a good position to spot potential fraud because they manage and invest their money, Harding says.

“Because we are part of their financial world, we look for changes in a client’s behaviour or actions that may seem off course and try to understand if they’re being mistreated in some way,” she says.

Harding says people may even consider coming up with a safe word, or hand signal for video or in-person meetings with an advisor, if they want to flag financial abuse but can’t discuss it.  An example is the “Signal for Help” one-handed sign, launched by the Canadian Women’s Foundation in response to COVID-19, which someone can use on a video call (not just with advisors) to silently show they need help and want someone to check-in with them.

Harding says financial elder abuse awareness is important and encourages people to talk to their advisors about how they can spot and prevent it.

“A trusted advisor is someone who doesn’t just invest, manage your assets, but also helps to protect them and you from falling victim to financial abuse,” Harding says.

If you think you or someone you know may be a victim of financial abuse, seek help. Contact someone you trust such as a family member, a friend or your advisor, or click here for a list of resources in your province or territory.

Financial abuse checklist

Do you think you — or someone you know — may be a victim of financial abuse? Here are some signs:

-Feeling pressure to give away money or purchase products/services you don’t want or need

-Someone has taken your money or cashed your cheques without your permission

-Someone frequently borrows money and doesn’t repay it

-You’ve noticed withdrawals from your bank account or credit card charges you can’t explain

-Someone has prevented you from making your own financial decisions or accessed your money, or not managed your finances as you’ve agreed

-You’ve felt forced into changing your will or signing legal documents you don’t fully understand

Ways to protect yourself:

-Keep your financial and personal information in a safe place

-Keep track of your accounts and legal documents

-Keep a record of financial transactions and changes to legal documents

-Read contracts and other documents carefully

-Tell someone if you think you are experiencing financial abuse: a friend, family member, health care or social services professional, legal or financial advisor, or member of your faith community or local authorities

-For major decisions involving your home or other property, get your own professional legal advice before signing any documents

-Keep in touch with a variety of friends and family so you don’t become isolated

-Remember that your money and property belong to you. They are not your family’s or anyone else’s

Checklist Source: Employment and Social Development Canada 

* Please note there are references to employees who are no longer with the firm, but were as of the date of publication.