Canadian seniors are among the richest cohorts in the world. This fact also makes them an attractive target for financial scams of various sorts.
According to a 2016 report from the Canadian Imperial Bank of Commerce, Canadians can expect a $750 billion windfall from their aging relatives over the next decade, a figure that is 50 per cent higher than the amount passed on in the previous decade.
This ongoing transfer – whose volume will only increase in coming decades – has already shaped the Canadian economy by contributing to high real estate prices, as flush seniors help their children and grandchildren enter competitive real estate markets. It also speaks to the wealth of Canadian seniors, a condition that has already drawn the interest of financial scam artists, some of whom are even relatives.
“Elder financial abuse is one of the most common forms of elder abuse, and its prevalence is increasing in sheer numbers,” write Marian Passmore and Laura Tamblyn Watts in a 2017 report titled Report on Vulnerable Investors: Elder Abuse, Financial Exploitation, Undue Influence and Diminished Mental Capacity.
This prediction rests on several premises.
The number of Canadian seniors will rise in coming years. Seniors already make up almost 17 per cent of the Canadian population, according to Statistics Canada, which predicts seniors could represent between 23 and 25 per cent of the total population by 2036, thanks to improved longevity.
But if seniors will live longer lives, their medical needs will inevitably intensify with age, leading to various forms of temporary or permanent cognitive impairments or diminished capacity.
“This cognitive decline occurs at the same time that people are likely to face more complex financial decisions involving more complex products, and have succeeded in accumulating more wealth,” Passmore and Watts write. “In addition, the older consumer is less well placed to be able to address the consequences of any poor financial decision at this later stage of life.”
In short, seniors are vulnerable targets, and once hurt, have little chance of recovery.
But if financial abuse can devastate older adults, who often depend on fixed incomes, it often remains unreported, often due to a combination of lack of awareness of the abuse, fear of being considered mentally incapable because the abuse happened, stigma of family violence, shame, or because the abuser may also be a caregiver or an important social connection, Passmore and Watts write.
A 2014 survey found 41 per cent of the older adults in the Lower Mainland and Victoria region alone experienced at least one situation of financial abuse. But only 6.4 per cent of those surveyed reported that another person had victimized them.
On top of common types of frauds and scams such as identity theft, credit and debit card frauds, and online scams, experts like Passmore and Watts point to six scenarios during which individuals of various types including children take advantage of seniors.
The most common of these appears to be the “Unsuccessful Son in the Basement” scenario during which a previously unsuccesful child convinces his parents, perhaps suffering from mild-to-moderate dementia, to invest in a new company that delivers far less than it promises.
This scam, according to published reports, accounts for 75 per cent of financial abuse cases involving elders that by family members perpetrate.
In fact, research clearly show that seniors face higher odds of falling prey to family members than to strangers. A 2015 report by Canada’s Department of Justice finds the vast majority of elder abuse incidents occur in the community and not in nursing homes or other residential settings.
Offenders, the report finds, are generally considerably younger than their elderly victims with about 40 percent under the age of 40, and the three categories of offenders — adult children, grandchildren, and other relatives; professional caregivers; and close friends or others in a position of trust — the majority fall into the first category.
So what is to be done?
Those concerned about elder abuse including financial abuse can contact the Seniors Abuse and Information Line (SAIL) toll free at 1-866-437-1940 to talk to someone about situations where they feel they are being abused or mistreated, or to receive information about elder abuse prevention. In addition to specific resources, the literature also warns against seniors isolating themselves, and a culture of silence.