From a financial request via an online romantic interest to a threatening call from the taxman, fraud attempts against older Canadians are wide-ranging and constantly evolving in their ability to deceive.
Unfortunately, many of these scams have proven effective in recent years. In 2018 alone, reports the Canadian Anti-Fraud Centre (CAFC), the top 10 reported scams by dollar loss duped this demographic out of nearly $25 million.
But contrary to popular assumption or media portrayals, seniors aren’t being targeted because they are “easy marks,” says Krista James, national director of the Canadian Centre for Elder Law. Often, their strengths are being used against them. “They think they’re probably more likely to respond to emails, they’re more polite, or maybe they’re more responsible and they’re the backbone of the family. So, if they send them some kind of fraud message linked to family or grandparents, the senior’s going to want to do something to help keep the family safe,” says James.
Although many scams aimed at older Canadians are sophisticated, the good news is there are telltale ways to spot them — and just being aware of what’s out there is a crucial step in stopping these individuals in their tracks.
Which scams are targeting seniors?
As Kathy Majowski, chairwoman of the Canadian Network for the Prevention of Elder Abuse notes, scams generally fall into three basic groupings — those carried out by someone the person knows, frauds by strangers, and consumer scams — organizations with practices that only “toe the line” of being legal. In terms of the number of frauds reported by seniors in 2018, extortion complaints topped the list. Jessica Gunson, acting call centre and intake unit manager with the CAFC, explains that these scams involve a threat, such as ransomware downloaded onto someone’s computer.
Last year, however, the bulk of complaints in this category were related to fraudsters calling consumers impersonating the Canada Revenue Agency claiming an individual owes back taxes. “There’s a threatening undertone that ‘you need to pay this right away or you’re going to be arrested, charged, and go to jail,’” says Gunson. Victims are often asked to pay with pre-paid gift cards such as iTunes or Google Play, or in Bitcoin, which is obviously not how the real CRA conducts itself.
Another popular con affecting older Canadians includes the ubiquitous “grandparent scam” — an entire arm of fraud targeting older adults. In this scam, fraudsters pretend to be a family member, perhaps a grandchild or a nephew, who calls claiming to be in trouble, and needs fast, and usually secret, financial help.
Matt Cohen, director of litigation projects at Pro Bono Ontario, and staff lawyer Jennifer Flores say the organization’s free legal advice hotline also receives daily calls from seniors about unscrupulous door-to-door sales practices. Although a new law took effect in Ontario last year preventing the unsolicited door-to-door sales of certain products and services, Cohen says individuals who signed contracts for home equipment rental under the previous regime continue to come forward, as well as those who have been affected after the ban, with some companies using loopholes.
The financial impact, they say, can be significant. Some seniors have signed a number of 10-year contracts, adding hundreds of dollars in equipment rentals to their monthly bills. In other cases, after an individual has stopped paying a contract, the company has put a notice of security interest on the title of their property, which can impact the person’s ability to refinance their mortgage or sell their home. These, says Flores, are notoriously difficult to remove, as they usually involve either paying it out and trying to recover the money later, or filing an application in court.
Also near the top of the list for seniors in terms of funds lost in 2018 were investment scams. As Doug Muir, director of enforcement with the British Columbia Securities Commission explains, some of the warning signs of investment fraud include guaranteed high returns with little or no risk, a request to move money outside the country to avoid tax, or an offer that includes inside information.
But while older Canadians often easily identify scams that promise a high return with low risk, Muir says some frauds have proven much more difficult to recognize, such as those involving any investment that, often unwittingly, is suggested through someone in your trusted network. “It doesn’t matter what the underlying investment is, if it’s something that’s coming from somebody you trust, that’s a red flag because we’ve seen it used time and again,” says Muir.
But as extensive as these scams are, it was another type of fraud that topped the list last year when it came to parting older Canadians from their money. In 2018, the CAFC says seniors reported losses of more than $9 million as a result of romance scams — representing almost $6 million more in losses than any other type of reported fraud against seniors.
As Gunson explains, romance scams usually begin online, via a dating website for example, are highly personalized and can go on for months — casting both an emotional as well as a financial toll on the victim. “When contact is made, they’re always going to imply that they are from your location or in the surrounding area, but that they are working overseas, so that’s the first red flag.”
Fraudsters, says Gunson, will invest time messaging and will almost always quickly profess their love, aiming to build trust with the victim. Then, she says, the “financial ask” will occur, perhaps their paycheque has been delayed or they need money for a plane ticket. The request always comes with a guarantee of payback, which the victim often believes as they “feel like they know” the individual. In some cases, she says, victims have ended up maxing out their credit cards, borrowing money from family and friends, and even remortgaging their homes.
How to recognize and prevent scams
Prevention is the best way to arm oneself against mass marketing fraud, says Gunson — essentially, the ability to recognize and reject a scam the second one is presented to you.
In terms of general best practices to keep yourself safe, says James, it is a good idea not to reply to emails or texts from unknown senders or to send your credit card number or money to anyone you don’t know. Also, says Gunson, keep your social media accounts private, keep your date of birth off your profile, shred sensitive documents, and keep an eye on your bank account activity and mail.
In many of these more personalized and sophisticated scams, there are also telltale signs that something doesn’t add up. For example, while the internet can be a great place to meet a potential love connection, Gunson cautions that if the person is unwilling to sit down with you at an actual coffee shop, that should be considered a red flag. “If you’re speaking with someone and a) if they’re professing their love very quickly and b) asking you for money, this is something you want to shut down immediately,” she adds.
With many threat-based frauds, scammers thrive on a knee-jerk reaction. When in doubt, says Gunson, take a step back. Do a quick Google search to see if others have written about the same issue or educate yourself on the new, trending scams via the CAFC website or through the Competition Bureau of Canada’s Little Black Book of Scams.
“They don’t want you to stop and talk to your family, they don’t want you to talk to your neighbour, they don’t want you calling our centre because they know the quicker that they can get you to send that money or provide that personal information, the better the payoff is for them,” she says. If something doesn’t sound right, trust your instincts. Connect with a trusted friend, or family member to talk through your concerns and hear their opinions.
Even if you’ve invited a company to come to your home, Flores urges consumers to always review contracts for a new home appliance or service carefully, as they are often filled with fine print and a number of onerous terms and conditions. As Majowski notes, consumers have the right to a cooling-off period before committing to a new service or product. In Ontario and Nova Scotia, for example, consumers have 10 days to cancel a contract signed in their home without having to give a reason. When it comes to investing, Muir says understanding the investment and knowing yourself as an investor — your goals and risk tolerance — are crucial.
If you don’t get answers to your questions or if the investment doesn’t make sense, says Muir, it is best to walk away. Ultimately, he says, speaking to a registered adviser is a good way to safeguard oneself. “A registered adviser has obligations to know their product, they have to know the client, they have to give them information about risk and about any conflicts and they have to be registered to sell securities.”
What to do if you’ve become a victim
Unfortunately, for a variety of reasons ranging from humiliation to fear of losing financial independence, the CAFC estimates that only five per cent of frauds are reported. But if you have fallen prey to a scam, it is important to not feel ashamed or embarrassed — sadly, a lot of these individuals have proven to be good at their jobs. “They weren’t stupid, they weren’t necessarily unaware, they were victimized because they wanted to believe the best in whoever scammed them,” says Majowski.
Indeed, Gunson says, reporting a fraud provides the best chance of recovering lost funds, will assist with information for an investigation, and potentially disrupt the scammer.
Fraud attempts — whether or not money or personal information has been exchanged — should be reported confidentially to the Canadian Anti-Fraud Centre by phone or online, which will take a complete file, including the consumer’s information, any documentation, receipts of payment, and any information on the person you were in contact with.
Gunson also advises those who have lost money or personal information to contact their local police, who will take a report but also need to be aware of scams going on within their jurisdiction. Also, she says, alert the credit bureaus if your personal information has been compromised.
Individuals who have signed a contract and feel they may have been the victim of an unfair consumer practice, says Flores, should seek legal advice with respect to rescinding the contract or for help fending off collections agencies, for example.
Investment scams of any amount should be reported to your provincial or territorial securities regulator, says Muir. “We have powers where we can freeze money, freeze assets, and maybe be able to get some of that back to investors,” he says.
It is also important to share your story with others. This helps to normalize the idea that this could happen to anyone and may even prevent someone else in your network from being scammed. “If we have every Canadian recognizing these scams before they get the phone call, the email, the text message, the profession of love online, if they have the ability to recognize that, we stop the scammers right then and there,” says Gunson.