Elder abuse is a problem that every financial advisor should be aware of

The risks that older Canadians face from those that would happily scam them or seize control of their finances has been highlighted in a coordinated effort by investment and securities industry regulators.

Yesterday (June 15) marked World Elder Abuse Day, a United Nations initiative which this year has focused on those adults who are in long-term care facilities.

It also highlights how elder abuse is a problem that exists in both developing and developed countries yet is typically underreported globally. In developed countries reports suggest 1-10% of older people are victims of some kind of abuse – not always financial – but that the true figure is likely to be higher.

From a financial perspective, the campaign provides useful information that advisors, friends, and relatives of older Canadians can use to protect clients and loved ones.

The Canadian Investment Regulatory Organization’s Office of the Investor has provided a checklist that can help older people from becoming victims:

• When receiving text messages, emails, or direct messages on social platforms from unknown contacts, STOP and THINK before you CLICK! 
• Keep your financial and personal information in a safe place and protect the information, keeping it private
• Get legal advice before signing documents that involve major decisions involving your home or other assets
• Be cautious about opening a joint bank account as the other person / people can withdraw funds without asking
• Keep records of any money you give away- noting whether it is a loan or a gift
• Have a Power of Attorney. Choose someone you trust to look after you, so that if you are ill or unable to look after yourself, your finances will be protected from others who may try to take advantage
• Name a Trusted Contact Person with your financial advisor. In specific circumstances, this allows your advisor to contact the individual about concerns related to your mental capacity and financial well-being.

"People often report feeling shame following a scam, but it is important to communicate quickly with your financial services provider if you believe you have been a victim," said Alex Williams, Senior Vice-President, Strategy, Innovation and Stakeholder Protection at CIRO. "Victims are often retargeted in what is called a recovery scam—whereby perpetrators claim to assist the victim, only to defraud them again. Getting ahead of scams by communicating with the right agents quickly if you suspect you've been scammed can make all the difference in protecting your assets."

Meanwhile, the Canadian Securities Administrators says there are several investment specific things that should be red flags:

• Avoid investment opportunities promoted online, especially those seemingly endorsed by celebrities or political figures or those that advertise lucrative, easy or quick returns. Imagery, video and voices can be easily generated with AI to look and sound real.
• Be cautious of online investing groups claiming to be run by investment professionals. Fraudsters will commonly direct potential victims to move their communications to chat groups created on WhatsApp, Telegram and Discord to keep conversations private and harder to trace.
• Be mindful of any new online connection, acquaintance or perceived love interest who asks probing questions about your finances or plays off your anxieties or fears when offering you an unrequested investment opportunity.
• All investment firms and their advisors in Canada are required to ask each of their clients to name a Trusted Contact Person (TCP). Sharing the name of someone you consider to be a trusted contact can help protect your accounts and give you peace of mind.
• Any individual or firm offering you investments needs to be registered with provincial or territorial securities regulators. You can check registration at AreTheyRegistered.ca, but remember that images, voice calls and video meetings can be AI manipulated. It is strongly advised that you do not send money to anyone you have not met in person or whose identity you cannot confidently validate.

“Older Canadians are often the target of financial scams and, more recently, fraudsters have been using AI to make the ads appear legitimate,” said Stan Magidson, Chair and CEO of the Alberta Securities Commission and Chair of the CSA. “By asking questions and starting important conversations about the warning signs of scams, we can help support the financial wellbeing of the seniors in our lives.”