Understanding Elder Financial Abuse
Elder financial abuse is a serious issue. Watch this video to understand how starting a conversation can help protect your loved ones from investment fraud.
How to Recognize Elder Financial Abuse
Personal relationships are often leveraged to perpetrate investment fraud. To gain the trust of an older adult, a fraudster will often offer help or become a close friend. Learn more about the ‘trust trap’ and other investment fraud warning signs here.
Fraudsters target older adults because they often have savings: investments, property, pensions, etc. Fraudsters know that older adults may be attracted to high-return, low-risk investment offers, because older adults are often looking to maximize their investments for retirement, or they want to leave money for their children and grandchildren.
Other common examples of elder financial abuse include:
- Theft of money, credit cards, bank cards, and/or possessions.
- Someone attempting to take over an older person’s financial affairs, including their investment portfolio.
- Someone pressuring or forcing an older person to sign legal or financial documents.
- Someone threatening or pressuring an older person to give money.
- Someone not allowing the older person to spend money on what he or she wants.
- Someone attempting or actually persuading, tricking, or threatening the older person to make changes to their will and/or power of attorney.
- Misuse of a power of attorney by engaging in acts that are not in the best interests of the older person.
In the above examples, the abuser can be someone the older person trusts and cares about, such as a family member, caregiver, or friend. This personal relationship makes it difficult for the older person to come forward to get help, especially if they care about the relationship they have with the person who is mistreating them.
Common Warning Signs of Elder Financial Abuse
Financial abuse can be difficult to identify or recognize. It is often a pattern, rather than a single event, happening over a long period of time. When protecting yourself from financial abuse, it’s important to remember that your money, property, and investments belong to you.
The following are some common warning signs, also known as the red flags, of elder financial abuse:
- Unusual financial transactions, such as bank withdrawals or the liquidation of investments.
- Sudden change in living arrangements.
- Sudden inability to pay bills.
- They are no longer buying things they need, like clothes, groceries, or medications.
- Unexplained disappearances of their valuable possessions, such as jewelry and art.
- Financial responsibility for a family member.
- Unusual fear of or sudden change in feelings about a particular person or people.
- Discrepancy between standard of living and financial assets.
Learn to Reject Elder Financial Abuse
When older adults are isolated, they are more vulnerable to becoming targets of financial abuse. Isolated older people are particularly vulnerable because fraudsters will discourage them to report abuse or suspect investments.
While anyone can be a victim of investment fraud or an unsuitable investment, older adults have less time to recover from a financial loss. A financial loss can also affect an older adult’s health or cause a person to withdraw from friends and family, thereby isolating themselves from important people in their network.
If you feel isolated, you’re not alone. There are many people who can help you protect yourself from elder financial abuse. You can take control and access support.
Risks of Elder Financial Abuse in a Digital Age
Fraudsters use every available opportunity and take advantage of global events to lure vulnerable investors into their schemes. The new way of living brought on by the COVID-19 pandemic opened up opportunities for the financial exploitation of older adults.
As older adults came to rely more on online services and communications during the pandemic, they opened up to many new people who knew where they lived, whether they lived alone, and what their vulnerabilities were.
The pandemic also changed the way older adults manage their money. Many older adults turned to online ways of transacting that they didn’t engage with before, and this may continue into the foreseeable future. This opens up more weak spots associated with access to private information and financial accounts online.
As we return back to normal, it is important to keep the lines of communication with older adults open. Having regular conversations about money and understanding their situation will help you identify the warning signs of elder financial abuse.
How to Prevent Elder Financial Abuse
Build your understanding of elder financial abuse and learn to reject and prevent it from happening to you and/or someone you know by:
- Staying informed and talk about financial matters with people or professionals you trust.
- Seeking the help of a registered financial advisor if you don’t feel comfortable managing your finances online.
- Understanding how fraudsters target seniors and community organizations.
- Thinking critically and double checking everything you hear or see online, as communicating online can interfere with our ability to recognize people’s emotions or true intentions.
- Investigating an investment opportunity or sales pitch, as well as the person promoting it, before handing over your money; or consider seeking independent, third party advice if you are unsure of an investment offer.
- Understanding affinity fraud and learning the affinity fraud warning signs.
- Learning to identify and avoid investment schemes with BCSC InvestRight’s Seniors and Adults Over 50: Check Before You Invest guide.
- Keeping track of your finances by reviewing your bank and investment statements regularly.
- Discussing future plans with your lawyer and making arrangements in case something happens to you and you are not able to communicate your wishes. This can be done by drafting a will, healthcare directive, and/or power of attorney.
- Getting help if someone pressures you to invest or asks to access your investment or bank accounts.
- Asking someone you trust for help if you feel a family member, friend, or care worker is pressuring you for money or seeking access to your finances.
- Being on the look-out for an overly protective friend or a caregiver, and staying connected to a trusted network of friends or relatives if you have any concerns.
Consider Appointing a Trusted Contact Person
To help protect older and potentially vulnerable clients from financial abuse and exploitation, Canadian securities regulators recently adopted the Trusted Contact Person (TCP) initiative. Your registered investment advisor or firm may have already asked you to provide the name and contact information of a trusted contact on your accounts.
Consider having a TCP if you have an investment account. By appointing a TCP, you provide your advisor with a tool to help protect you should they suspect you are experiencing financial abuse or showing signs of cognitive decline.
A TCP may be a family member, attorney, accountant, or another responsible person who respects your privacy and has your best interests at heart. When naming a TCP, you will provide written consent for this person to be contacted, in limited circumstances, if there are suspicions about investment fraud or if your advisor has concerns about your ability to make financial decisions, and has been unable to reach you.
|Note that a TCP is not the same as a power of attorney, who has the authority to make financial decisions on your behalf. Trusted contacts do not have any authority over your investment accounts, cannot make decisions on your behalf, and will not be given access to detailed account information.|
Naming a TCP is optional; however, it can be a valuable resource to help your investment advisor keep your accounts safe and protect your financial well-being. It can provide another layer of protection against elder financial abuse.
The BCSC has developed a Trusted Contact Person form that you can complete and take to your registered investment advisor.
Many British Columbians Unaware of the Signs of Elder Financial Abuse
In 2021, the Canadian Securities Administrators (CSA) conducted a national survey to understand how elder financial abuse impacts people across Canada. In total, 1,500 Canadian adults aged 18+ participated in the study. Read the full Canadian stats here.
The study results showed that one third (31%) of British Columbians personally know someone who experienced elder financial abuse. At the same time, half of all British Columbians (50%) say they could not recognize the signs of financial abuse, while only 42% know where to report incidents of financial abuse.
For other findings from British Columbia, visit our Research page.
How to Report Elder Financial Abuse
Abusive relationships rarely end on their own and they can become worse over time. If you think you or someone you are close with are being taken advantage of financially, ask for help.
Everyone has the right to be treated respectfully and to make decisions about their own money.
If you feel that you are being subjected to elder abuse, talk to someone you trust, such as a friend, family member, police officer, lawyer, or staff member at your financial institution.
Sometimes, older adults who are experiencing financial abuse may decline help when offered. This could be because of a number of reasons, including:
- A fear of what will happen to themselves or the abuser.
- Family loyalty.
- They don’t know where they can get help.
If an older person you know declines help with an abusive situation, don’t give up. Support their wishes, reassure them that you are here to help, continue to offer support, provide information, and consult with professionals if necessary. If at any point you are worried about the immediate safety of the older person, contact the police immediately.
Where You Can Report Elder Financial Abuse in British Columbia
If you suspect investment fraud, contact the BCSC:
If you suspect other forms of financial abuse, these are resources you can look to for help:
- Seniors Abuse Information Line (SAIL) from Seniors First BC is a resource for older adults to receive general information about elder abuse. It is also a safe contact to discuss possible abuse or mistreatment. BC residents can contact SAIL at 604-437-1940 or 1-866-437-1940 (toll free).
- Government of BC – For protection from elder abuse or neglect, visit www.gov.bc.ca/elderabuse.
- Public Guardian and Trustee at 604-660-4444, or visit http://www.trustee.bc.ca/Pages/default.aspx.
- Legal Services Society at 604-408-2172 or toll-free at 1-866-577-2525, or visit https://lss.bc.ca/.
- Contact the RCMP or local police if you feel the abuse is a criminal matter. You can also call VictimLink BC at 1-800-563-0808 to receive information and referral services if you are a victim of a crime.