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Elder abuse: How to protect your family against financial fraud

Mickey Rooney said he felt scared, trapped, frustrated, and used when he was manipulated financially by some of his own family members. The Oscar-winning actor testified before U.S. Congress last year as it considered legislation to curb elder abuse. He admitted he also felt helpless after his stepkids swindled him, with his stepson spending Rooney's money as if it were his own.

Financial abuse is a common form of elder abuse in Canada, with men and women losing billions each year as a result of scams by strangers and meddling by family members.

Approximately one million Canadians are victims of mass marketing fraud and identity theft annually, at a cost of $10 billion, according to Canada's Competition Bureau.

Furthermore, nearly 80 per cent of mass-marketing fraud — using the phone, mail, or Internet to reach a large pool of potential victims — is conducted by organized crime groups and is currently the second-most common criminal activity funding terrorist activities.

"These are serious problems and we need to empower seniors to protect themselves," says Krista James, national director of the Canadian Centre for Elder Law, a national nonprofit body that provides public education, outreach, and research on elder legal issues.

"The area I get the most calls about is financial abuse connected to power of attorney where family members are involved. There can be shame and embarrassment when it comes to your own family hurting you."

Don't become a target

Several factors make seniors easy targets for financial abuse, whether it's by organized crime gangs making cold calls or by greedy, unethical relatives claiming to help their elderly aunt handle her finances.

"Social isolation is one of the pieces; it enhances vulnerability," James says. "When you're living by yourself and you're lonely and suddenly someone starts giving you lots of attention, it can be very appealing. Then they start asking for money. It starts small and gets bigger. Plus, isolated people don't have the same sounding board about their decisions."

Then there's the risk of being swindled as a result of the Internet.

"Older people weren't raised in a climate where technology affected everything," James notes. "With that might come some naiveté related to how people can take advantage of you through computers and other technology. This applies to everyone: if you want to protect your money you need to protect not just your passwords but your personal information."

Romance scams

Daniel Williams, call centre manager of the Canadian Anti-Fraud Centre, says of all the different types of scams out there, romance scams were the biggest problem last year, with seniors losing close to $4.5 million.

"This is a massive problem, claiming more and more senior victims each year," Williams says. "Many seniors are looking for love and companionship on various legitimate dating or social-network websites, and while many are meeting other good people, we get the reports where criminals are involved. These are very sophisticated organized crime gangs doing fraud on a large scale.

"Apart from the often massive amounts of money which the victims lose, there's also the emotional cost where the victim has invested a huge amount of their heart and soul in a relationship which they thought was real but was in fact nothing but a scheme to separate them from their money."

Fake identity and health scams

Another leading scam is the "emergency" or "grandchild" one.

"Suspects cold call seniors and pretend to be a grandchild in trouble, often claiming to be arrested in a faraway city they were visiting for a wedding or funeral and needing money to get out of jail or pay for damages for rental cars," Williams explains. "The scammers are expert actors and cover the differences in voices by claiming to have broken their nose in an accident or suffering from a cold or being hoarse from crying all night.

Then there are scams related to seniors' health concerns.

"The usual scheme involves the senior receiving a phone call to do a survey on health concerns, followed by a call claiming they have won a prize which must be delivered to their home. With the delivery comes a product demonstration of very overpriced vacuum cleaners, air purifiers, and water-filtration systems," Williams says.

For all the nasty schemes out there, there are several steps people can take to protect themselves:

  • Don't sign any legal document if you don't understand the impact of that document, particularly if it relates to power of attorney. "Whenever you're being pressured be curious and suspicious because it might be that it's not for your best interests," James says. "Trust your instincts."

  • Carefully select your attorney. Choose the person who will do the best job, not the person you care about the most.

  • Know you can revoke, or cancel, a power of attorney at any point as long as you are legally mentally capable.

  • Understand the impact of opening a joint bank account. Both people own 100 per cent, James notes, meaning that the other person can legally drain all the money from the account without your consent.

  • Don't agree to deals, offers, or sales pitches right away. Take time to get independent advice, especially if solicited over the phone.

  • Never give credit-card or online account details to anyone you don't know or trust.

  • Remember that legitimate lotteries do not require you to pay a fee or tax to collect winnings.

  • If you've been told you won a contest, make sure it's one you actually entered. You can't win money or a prize unless you've entered a contest yourself or someone you know entered on your behalf.

  • Don't reply to spam emails.

  • Never reply to text messages offering you free ringtones or to missed calls from numbers you don't recognize.

  • Don't call or text phone numbers beginning with 1-900 unless you are aware of the cost involved and carefully read terms and conditions when texting short codes.

  • Never give out your personal, credit-card or online-account details over the phone unless you made the call yourself and the phone number came from a trusted source.

"It's a delicate thing to articulate, but at fundamental level we're forgetting to value the older people in our community," James says. "Legal education is very important to prevent abuse, but at a deeper level, respect for our elders is part of the solution."

June 15, 2012 marks World Elder Abuse Awareness Day. To learn more about the initiative, please visit the International Network for the Prevention of Elder Abuse website.