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Financial fraud is proliferating and growing ever more sophisticated. How to protect yourself and your elderly loved ones from being scammed.
You don’t have to be a senior to be aware that scams of all sorts abound in both the physical and—increasingly—the cyber world. Since Saturday, June 15 is World Elder Abuse Awareness Day, it’s an opportune time to address this problem.
Sadly, the rise of artificial intelligence (AI) has exacerbated frauds of all kinds. While anyone can fall prey to technology-enabled schemes to separate them from their money, seniors need to pay particular attention, since they have more money to lose and less time to recoup it and are often socially isolated.
Flip through the many articles on MoneySense.ca and you’ll see we have covered such topics as getting scammed through e-transfers, phishing, crypto schemes, identity theft and more. There’s financial fraud in general that targets bank accounts, credit cards and potentially every other aspect of your financial life.
It’s overwhelming, and the situation is unlikely to improve any time soon.
Frauds can be conducted by telephone, email, texting on phones and via social media, not to mention the old-fashioned knock on a homeowner’s door. In the last few weeks, there have been media reports of widespread frauds being perpetrated on Canadian Facebook users, where scammers get access to personal accounts and blitz the user’s friends and family on Facebook and other social media accounts.
According to credit reporting agency Equifax, fraud is now the top crime perpetrated against older Canadians. Sadly, many seniors fail to report these crimes to the police because they feel shame or embarrassment about being duped by scam artists. So, the impact is higher than we even realize.
Identity theft is particularly worrisome for seniors. As Equifax puts it, “a scammer may try to get information such as a bank card or personal identity number, credit-card number, health card number or a driver’s license or Social Insurance Number. They can then apply for credit cards, take out loans or withdraw funds in the person’s name.”
If you lose your wallet or discover that critical mail has gone missing, Equifax encourages you to report it to banks and credit-card companies, as well as to the law enforcement. Family members can help seniors find a secure place for personal documents and encourage them to leave items at home that they may not need, such as a Social Insurance Number card or passport.
Elder Abuse Prevention Ontario (EAPO) point out that rising senior use of smartphones and the internet is contributing to “staggering financial losses” for this demographic, including phishing and smishing.
By now most readers will be familiar with the term phishing, which EAPO defines as an online scam designed to trick you into disclosing personal or financial information for the purpose of financial fraud or identity theft. But have you heard of a similar-sounding second scam, smishing? I certainly had not until I did the research for this article.
Smishing is a similar tactic to phishing but uses SMS messaging (a.k.a. text messages on smartphones) to reach its targets. It can be dangerous because people tend to trust texts more than emails, especially when they originate from what appears to be close family members or friends. (As I was writing this article, two family members and I all experienced smishing attempts on our smartphones.)
Defensive tactics against either are similar: don’t click on links in unsolicited emails or unsolicited text messages. If it’s possible to find a phone number on a genuine site—not the one contained in a suspicious email or text message—try phoning it to confirm the activity is legitimate. Even if it appears to come from a family member or friend, be suspicious if they ask you to buy something out of the blue, like gift cards or transfer money. (Read: “Can I get scammed through an e-transfer?”)
But not all modern scams depend on the internet. Even the old-fashioned telephone can be the gateway to a scam. You’ve probably read media reports of the so-called “grandparents scam,” where a con artist pretends to be a grandchild in some crisis situation requiring the immediate transfer of funds. These days, the rise of AI means even seemingly unique voices can’t be trusted.
EAPO suggests that if you receive such a call, hang up and report it immediately to the Canadian Anti-Fraud Centre. To ease your mind, call or text your family members directly to make sure they’re not in trouble.
Seniors, especially the recently widowed or divorced, may be particularly susceptible to romance scams, which you see a lot in mass media reporting. This was the second most common scam in Canada in 2022, with recently bereaved seniors most vulnerable. There are five red flags to watch for: a relationship that moves very quickly, a reluctance of the supposed “suitor” to meet in person, premature requests for personal information, not sharing many details about themselves and—the real giveaway—requests for money.
To prevent this, don’t give personal information to someone you’ve met online and don’t accept e-transfers on someone else’s behalf. If you are scammed, contact the police and the relevant financial institution.
The Advocacy Centre for the Elderly (ACE) warns of several senior scams in Ontario, with “new ones invented daily.” While the original version of the grandparents’ scam was based on telephone calls, these too have morphed into technologically trickier versions. Scammers may now contact grandparents via their grandchildren’s social media accounts (like Facebook or Instagram) or by text message. ACE also warns that scammers may also pose as law enforcement officials, lawyers or other persons of authority claiming to help a family member. Apart from the usual cautions, it suggests that families create code words with family members that they will have to use to verify who they are. Try to think of questions and answers that only close family members will know the answers to and have never been disclosed online in any form.
ACE also warns of a new (as of January 2022) Ontario scheme I’d not previously heard of: the Cross-Ontario Mortgage & Notice Of Security Interest (NOSI) Scheme. It involves a mortgage or lien that has been registered to the title to their home without their knowledge or consent.
“The scheme targets highly vulnerable home-owning seniors and often starts with exploitative, unfair door-to-door sales contracts financed by high-interest loans that are secured with NOSIs or private mortgages.”
These scams often follow a similar pattern: elderly homeowners are duped into signing unfair door-to-door home service contracts for products and services they do not need and can’t afford. These are grossly overpriced and provide little or no value. The homeowner may be approached by a “groomer,” who makes repeated visits and falsely promises to get them out of these unfair contracts free of charge. They may receive false promises of “rebates” if they sign documents that can pay for “free” renovations. The homeowner later discovers a private mortgage has been placed on their home with unfair terms including interest rates as high as 25%. There could also be high brokerage, referral and lenders’ fees, as well as pre-payment of interest for a full one-year term (making the mortgage difficult to discover until it becomes due). Given how unaffordable these are for seniors on modest pensions, they often default on the mortgage payments and are served with legal proceedings to sell or foreclose on their home.
An eye-opening link on the huge extent and variety of fraud is available at the Canadian Anti-Fraud Centre. It reports that almost 64,000 frauds in 2023 affecting almost 40,000 victims, and almost 11,000 more in the first quarter of 2024 with 7,900 victims. The site lists scores of scams alphabetically, ranging from duct cleaning to fake business proposals, foreign lotteries, holiday scams, initial coin offerings for crypto products (ICOs), sextortion and much more.
The Toronto Police Service (TPS) says these crimes are now so widespread that scams targeted at seniors are now “the crime of the 21st century.” It covers the aforementioned romance and grandparent scams and also warns about home renovation scams, where the “sole intention of the fraudster is to get a signature on a contract, do little, poor or no work and take as much money” as possible.
To avoid being duped, TPS urges seniors to never allow strangers to enter their homes (via internet, phone or door) and take information about them and/or their assets. Read contracts carefully and never sign contracts with any blank lines, as someone may later add clauses that will harm you. Shred bank statements, financial records or receipts with credit-card numbers on them. To report a crime anonymously, call Crime Stoppers at: 1-800-222-8477 (TIPS) or report it online at: www.222tips.com.
GetCyberSafe.ca bills itself as a “national public awareness campaign” to help Canadians protect themselves online. It includes a Get Cyber Safe Checkup created by the Government of Canada. The Get Cyber Safe campaign was launched in 2011 by Public Safety Canada as part of Canada’s National Cyber Security Strategy. According to its media relations, the campaign became the responsibility of the Communications Security Establishment Canada (CSE) in 2018 after an update to the National Cyber Security Strategy and the creation of the Canadian Centre for Cyber Security (Cyber Centre) within CSE. It also works closely with Canada’s international Five Eyes partners (U.S., U.K., Australia and New Zealand) on all matters relating to cyber security to help build a global cyber-security culture.
The Cyber Centre says you should have a unique password for every account you have, which can be made easier by using a password manager, an app that stores and manages online credentials as well as generates passwords. It also suggests using sentence-like passphrases, not just passwords. If available, you should use multi-factor authentication app or texts. Check the privacy settings. Usually it’s a feature you can just turn on.
The Cyber Centre also recommends backing up your data at least once a week. It suggests familiarizing yourself with the aforementioned Canadian Anti-Fraud Centre (CAFC), which is a joint project of the Royal Canadian Mounted Police (RCMP), the federal Competition Bureau and the Ontario Provincial Police. The site allows you to browse the major scams in circulation, tips on protecting yourself, what to do if you’re a victim and how to report a fraud.
The National Post reported early in June that the Auditor General found the RCMP and other agencies are under-resourced to deal with cybercrime. The CAFC reported more than $500 million in fraud in 2023, but estimated only 5% to 10% of crime is reported. Auditor General Karen Hogan says there needs to be a one-stop shop for Canadians looking to report cybercrime.
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What with all the anti-fraud web sites out there and how many sites can be spoofed by bad actors, I asked GetCyberSafe whether all these fraud-education sites are themselves safe. They replied via email that indeed search engine optimization (SEO) is one of the tools “threat actors” may use. (Essentially, the website is built by using keywords to rank high when you search for it.)
“This pushes their websites to the top of search engine results, making them appear more trustworthy as a result of their higher ranking when they are in fact malicious,” it explained, adding that “spoofing, which aims to mimic a trusted source to give the end user a sense of trust into divulging private information, is another way they can achieve this.”
Therefore, it says, users cannot assume that the top results of a search are the most trustworthy.
Don’t click on links or download documents you aren’t sure about, and look for signs a site may not be legitimate. Ask: Does it look too good to be true? Does the quality look off? Are the images and the grammar up to par?
I asked the Cyber Centre how the top cybercrimes have changed in the last five years. Its reply: “The threat landscape available to fraudsters has expanded considerably over the years, and the technology has evolved rapidly.” It cites as an example the rising difficulty of spotting phishing emails. This used to be relatively easy because of obvious misspellings, grammar mistakes and poor-quality images. But “now, technology has evolved to give everyone access to create very believable, well-crafted emails with generative AI tools. The distribution of phishing messages can be automated to reach more people faster and at little cost.”
See also the CyberCentre’s unclassified National Cyber Threat Assessment 2023-24. For more about protecting yourself against phishing attacks, read Don’t take the bait: Recognize and avoid phishing attacks. For those concerned about ransomware attacks, check out Ransomware: Don’t get locked out.
Other tips for individuals? Again, use multi-factor authentication on your personal and banking accounts. Check there is a locked padlock to the left of the URL in your internet browser. This padlock symbol helps protect your personal information. No padlock, and your info is at risk. Call Canada’s main credit reporting agencies and put a fraud alert on your credit report: Trans Union Canada (1-866-525-0262, Québec 1-877-713-3393); Equifax Canada (1-866-779-6440).
What do financial planners say about senior fraud? Fair Winds Financial Coach Bob Joyce provides three reasons seniors are so often targeted for fraud:
I asked how seniors can defend against this, and Joyce suggested that “a mindset and routine of self-protection” can be more helpful than researching specific scams in detail, because “scammers are skilled at adapting, and scams are always changing.” The first line of defence is simply to ignore the phone call, email or even a knock on the door if you aren’t expecting it and don’t recognize the person delivering it. Don’t respond right away. Don’t open email or texting attachments and “never give out or confirm personal information in an email or over the phone.”
In the case of possible credit-card fraud, Joyce recommends contacting the credit-card company immediately. “In most cases, the fraudulent charges will be reversed after they have cancelled your card and issued a new one.” Don’t delay to contact them, though.
When asked about any new trends targeting seniors, Joyce says more and more phishing emails and texts are being sent in the middle of the night, “hoping to trick people into opening them when they first wake up, before that all-important first cup of coffee.”
What about senior do-it-yourself (DIY) investors who use an online brokerage? Clearly, be very careful about not sharing passwords and PIN (personal identification) numbers. Don’t let your computer auto-save the password but commit it to memory and rekey it every time you sign in.
However, Joyce doesn’t believe DIY platforms necessarily leave seniors or younger investors more susceptible to fraud. “The use of multi-factor authentication can helps to prevent unauthorized access to online accounts.”
Still, self-directed investors need to be vigilant when making trades: “Trading errors, such as buying instead of selling, entering the wrong symbol and other errors can be very costly to the investor.”
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Adam Chapman, a Certified Financial Planner and founder of London, Ont.-based yesmoney.ca, has seen his fair share of elder fraud over the last 20 years. While many scammers try to make their approaches seem like an emergency with an urgency to act, the more common scams actually don’t seem like emergencies at all, Chapman says: “Especially with the elderly, they may start with something smaller and friendly, then work their way up to bigger scams.”
Many victims may be smart and highly educated but can fall victim regardless. “It’s not just people with low financial literacy.” In his practice, Chapman emphasizes the emotional side of money, especially for retirees.
Clients look for him to be a gateway between them and their money. So, if some third party pitches them on a possibly dubious financial transaction, Chapman trains his clients to contact him first before making any quick financial decision, even if it doesn’t feel like an emergency.
In 2022, the Canadian Securities Administrators (CSA) initiated a program called the Trusted Contact Person or TCP, defined as “a person you authorize your financial firm to contact in limited circumstances.” That might be when you’re travelling, there’s a natural disaster or you simply have concerns about a possible fraud. It suggests that anyone with an investment account should have a TCP. However, the CSA cautions, a TCP will not be able to make trades in or make decisions about your account, and being a TCP does not make them a power of attorney, legal guardian, trustee or executor.
Sadly, it seems we now live in a world where very few people can be trusted. Increasingly, all encounters with strangers—be they in the physical or the cyber world—need to be viewed with some degree of skepticism or suspicion. “Could this be a scam?” is a question you need to train yourself to ask virtually every time you pick up your smartphone, sit in front of your computer or answer an unexpected knock on your front door.
Forewarned is forearmed.
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