Financial Scams Against the Elderly – the $100M “Business” Targeting Retirees
Table of Contents
Scamming is big business in Canada – and scams against the elderly are unfortunately becoming increasingly widespread. To mark Fraud Prevention Month, we’ve produced this mini guide to scam prevention for Canadians to help you avoid becoming a scamming victim.
Canadians lose on average over $100 million a year to scams, with almost $20 million being scams against the elderly. These are just the reported scams, however; the true figure is estimated to be much higher.
So you know what to look out for, here are the top scams targeting the elderly, according to the Canadian Anti-Fraud Centre, along with advice on how to protect yourself from them.
Scams on the elderly don’t get much more heartless than this one. While this is not a scam exclusively targeting the elderly, retirees are often the victims. Scammers typically befriend their victims online, often through reputable dating sites. The scammers use fake photos and identities to fool their victim and use emails or phone calls to convince them that this is a real relationship.
Often claiming to be temporarily overseas, they use grand displays of affection and professions of love. Once the scammers feel they have their victim’s trust, they start to ask for money, usually because of some sort of “emergency” that has just come up.
A 75-year-old Ontario woman lost $140,000 sending money to her online sweetheart, “Alan”, who wrote her love poems and chatted to her by phone. Eventually “Alan” asked for money, saying he needed it to bribe officials after being arrested while on business in India. In spite of warnings from her financial advisor and her bank that this was probably a scam targeting the elderly, she ignored their advice before finally realizing “Alan” was a fraud.
What to watch out for:
- Anyone you meet online who asks you for money or to cash a cheque for them, when you’ve never met them in person.
- Anyone who is currently overseas.
- Anyone who professes love for you when you’ve never met.
Prize or lottery scams
Canadian lottery scams, or prize scams, target the elderly by phone, email, mail or even social media, informing them that they have won a lottery or sweepstake. They then ask for a fee to cover taxes or legal fees.
As well as stealing your money for the fee, scammers also try to get their victims’ financial information so that they can access their accounts, which they then use to launder money. One 81-year-old woman in Lethbridge, Alberta, lost $250,000 due to a Canadian lottery scam after she received a letter from the Bank of America telling her she had won an American sweepstake.
What to watch out for:
- Any lottery for which you didn’t buy a ticket.
- Anyone asking you to send them money to receive a prize.
- Counterfeit cheques sent to cover costs.
Emergency scams, aka the grandparent scam
This is one of the main scams targeting the elderly. Scammers will contact their victims by phone, social media or email, claiming to be a close relative who is in some kind of trouble or emergency situation (typically involving jail or hospital), usually overseas.
They ask for money to be sent, usually via money transfer services or prepaid gift cards, to pay for legal bills or hospital treatment. A Kelowna, BC woman in her 70s was scammed out of $10,500 after receiving an overseas call from someone claiming to be her son, saying he was in trouble with the police.
What to watch out for:
- Anyone claiming to be a family member overseas (or a friend calling on behalf of your relative) who says they’re in trouble.
- Any unknown caller asking for information on your family members.
- If you are unsure if a call like this is legitimate, you can check the family member’s whereabouts with other relatives before you provide any information to the caller.
There are several scams offering fake services, but when it comes to scamming the elderly online, the most common one is when someone claims to represent a computer company such as Microsoft. They tell their victims that their computer has been hacked and that they need technical support. The scammer then demands a fee for this service.
They try and get the victim’s credit card and also attempt to get remote access to their computer, so they can steal more funds. Sometimes they will hold a computer’s data hostage and demand a ransom for its release.
The police are constantly trying to close down people scamming the elderly, many of whom are based overseas. In late 2018, Indian police arrested 63 suspects who were posing as tech support workers for several companies such as Microsoft and Apple and targeting North Americans.
What to watch out for:
- Any service calls that are unsolicited.
- Any pop-ups or websites telling you to call a service number.
- Anyone asking for payment with bitcoin or gift cards.
Other scams to be aware of
Although not just a scam against the elderly, the CRA scam is worth mentioning because it is so widespread: the RCMP estimates it has cost thousands of tax payers around $15 million. Scammers call people’s homes posing as Canada Revenue agents. They’re often aggressive and state that you have unpaid taxes that need to be paid immediately and give a number to call. Threats include arrest, deportation, a lien on assets and bank accounts, and other undisclosed “legal consequences” until you pay what you “owe”.
Some scammers will send emails or text messages telling you to click on a link to get your refund, that you are accused of tax evasion or an investigation has been started on your claim. The aim is to gather your personal information or extort money from you, often in the form of bitcoin or pre-paid credit or gift cards. It is important not to click on any links sent, or provide any personal information to these scammers.
Another common scam is one that involves a phone call, text or email asking you to verify your banking details. It sometimes tells you that your card or account has been disabled for security reasons, and then gives a link to click on to enable it. A couple in Nova Scotia were victims of this scam and lost $3,000. Make sure to confirm these calls, emails or texts are legal before opening or responding. If you are not sure, you can check with your bank directly.
Here are some great resources from the Canadian Banking Association on how to educate yourself and fight fraud online
How to report a scam
If you have become a victim of a scam, gather all the information you can relating to the scam and contact your local police. Then, report it to the Canadian Anti-Fraud Centre. When it comes to scam prevention for Canadians, Canada’s Anti-Fraud Centre’s site also has up-to-date tips on protecting yourself from all known current scams. It is important to educate yourself and your loved ones about this so that you can protect your assets.
If you come across a scam against the elderly (if you or a loved one are contacted by a scammer but don’t fall for it), you should also report this to the Canadian Anti-Fraud Centre, as well as the Better Business Bureau. Their scam tracker has details of all new scams that are reported to the site.
The best way to guard against fraudulent scams is to verify everything. Don’t buy into any unsolicited product or service offers or appeals for money. Do your research, talk to someone about it and ask for advice.
Never divulge personal and private information like passwords, pin numbers or banking information, as this can lead to credit card or bank account fraud.
Just remember, when it comes to scam prevention for Canadians, a general rule is to act on the side of caution – and if you aren’t sure, ask for help!
The Reverse Mortgage Facts You Need to Know!
Read about the pros and cons of a reverse mortgage to see if it is right for you.