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Scotia Wealth Management

Protecting seniors from financial abuse

— Scotia Wealth Management

October 20, 2023

Financial abuse can take many forms. Recognize the different types that target seniors.

Did you know fraud is the number one crime committed against older Canadians?¹ It’s true—and sadly, financial abuse is more widespread than ever among vulnerable seniors. Here’s how you can help protect yourself and your loved ones.

Types of financial abuse

Financial abuse involves one party unjustly trying to take money, property, or information from another. Anyone can perpetrate this type of abuse, but often it is someone close to the victim, like a family member, friend, or caregiver.

Here are a few common examples of financial abuse that targets seniors:

Financial scams

These usually occur over the phone or online and involve a fraudster impersonating a trusted person or entity, like a bank, government agency, company, or family member. The fraudster then attempts to persuade the victim to send them money or gain access to the victim’s personal or financial information.

Power of Attorney abuse

While Powers of Attorney are typically a valuable estate planning tool, there is the potential for them to be abused. The person appointed as your loved one’s Attorney (not to be confused with a lawyer) may take advantage of their position and try to control your loved one’s finances for their benefit.

Undue influence

This occurs when individuals take advantage of their relationship with the victim to persuade them into making decisions against their wishes. This can include withdrawing money from bank accounts, changing official documents to the fraudster’s name(s), or changing the victim’s will in a self-dealing manner.

Red flags

Several warning signs may indicate your loved one is being financially abused:

  • Increased dependence on one person, such as a friend or caregiver
  • Abrupt increase in spending activity or withdrawals
  • Unexplained charges on credit cards
  • Newly created joint accounts
  • Sudden changes to legal documents, including wills and Powers of Attorney

Prevention strategies

Secure personal information

It is crucial to keep personal and financial information safe and secure. This includes name, address, birth date, Social Insurance Number (SIN), and bank information. Ensure your loved one does not give this information to anyone over the phone or online that they have not directly contacted. Also, shred and dispose of any documents containing personal information.

Power of Attorney

Ensure your loved one appoints (a) trustworthy Attorney(s) for Property who will act in their best interests. You may suggest they appoint several people or a trust company to ensure their affairs will not be mismanaged.

Name a Trusted Contact

To help protect investors, particularly older and vulnerable individuals, from financial abuse and exploitation, the Canadian securities regulators recently introduced the Trusted Contact Person (TCP) initiative. If you have an investment account, you may be able to name a TCP. This individual cannot be involved in making financial decisions for you but is identified to your investment advisor as someone who can provide objective information if specific concerns are raised related to your overall personal and financial well-being.

Don’t be afraid to say no

Remember, your loved one should never be afraid to say no if they feel pressured or coerced into making unwise financial decisions.

1 https://www.canada.ca/en/employment-social-development/corporate/seniors/forum/fraud-scams.html

Legal

This publication has been prepared by Scotia Capital Inc. and is intended as a general source of information only and should not be considered as personal and/or specific financial, tax, pension, legal or investment advice. We are not tax or legal advisors and we recommend that individuals consult with their qualified advisors before taking any action based upon the information contained in this publication. Opinions and projections contained in this publication are our own as of the date hereof and are subject to change without notice. While care and attention has been taken to ensure the accuracy and reliability of the material in this publication, neither Scotia Capital Inc. nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of such material and disclaim any liability resulting from any direct or consequential loss arising from any use of this publication or the information contained herein. This publication and all the information, opinions and conclusions contained herein are protected by copyright. This publication may not be reproduced in whole or in part without the prior express consent of Scotia Capital Inc.