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Financial Abuse of Older Adults

Current and evolving statistics confirm that our population is aging rapidly. With longevity can come an increase in the occurrence of medical issues affecting cognitive executive functioning.[i]

There are a wide variety of disorders that affect decisional capacity which increase an individual’s susceptibility to becoming vulnerable and dependent and, unfortunately, invite the opportunity for abuse, and exploitation.

According to the Canadian Department of Justice, financial abuse is the most commonly reported type of abuse against older adults, yet its prevalence and incidence in Canada is largely unknown due to obvious factors associated with under-reporting.[ii]

Due to the complexities and layers of potential action and reaction from a range of stakeholders including family, the police, health care professionals, the legal community, and financial institutions, effective and consistent strategy is not easily applied.

Elder financial abuse is defined as “financial exploitation of an older person by another person or entity, that occurs in any setting (e.g., home, community, or facility), either in a relationship where there is an expectation of trust and/or when an older person is targeted based on age or disability”.[iii]

Some examples of elder financial exploitation includes:[iv]

  • Misusing/abusing a CPOAP;
  • stealing an older adult’s money, pension cheques, or possessions;
  • committing fraud, forgery or extortion;
  • sharing an older adult’s home without paying rent, and/or a fair share of the expenses;

The perpetrators include a wide variety of people ranging from close family members, such as adult children, caregivers, spouses, especially in the predatory marriage context, and strangers that may even include offshore scammers.

No one is protected from becoming a victim of fraud. Fraudsters continue to re-invent ways to prey on victims and the schemes/ scams are becoming more sophisticated.

The story of Marian Simulik, city treasurer for the City of Ottawa, is an example of how even the sophisticated are not shielded from becoming a victim of a scam.[v]

In July of 2018, Ms. Simulik received a spoofed email that impersonated the manager of the City of Ottawa, and tricked her into wire-transferring nearly $128,000 CAD to an American bank account.

Ms. Simulik only realized that she had been a victim when she received another email from the fraudster acting again as the city manager, requesting a further transfer of $154,238 USD.

Fortunately, the fraudster’s bank account in the United States was being monitored by the U.S. Secret Service, and they were able to trace some of the money left in the account and the Royal Canadian Mounted Police were notified.

In yet another case in 2017, an associate lawyer from Dentons in Vancouver was duped into wiring $2.52 Million Dollars to a Hong Kong bank account by fraudsters with knowledge of the firm’s work on a real estate deal.[vi]

One way to avoid falling a victim of fraud is to verify the identity of the contact, by calling the relevant organization directly and not use the contact details provided in the message/email.

While some studies suggest that older adults are less likely to be a fraud victim since they have more life experience, the reality is that older adults are more vulnerable to becoming victims and easy targets of financial exploitation due to several factors:

  • incidence of potential unknown cognitive decline, whether brought about by disease or other changes in an aging brain;
  • the wealth of older generations, which makes them targets, though notably, the elderly poor are at even greater risk;
  • a shift in pension trends, where the responsibility has shifted to the elderly to manage their retirements and savings; and
  • the aging of the Baby Boomer generation and increased life expectancy (with an average well into the late 80s for both men and women, such that there is a steep rise in the population of our seniors.[vii]

Elder financial abuse has gained increasing attention from financial institutions, firms and professionals. The role-players recognize that to be able to address this issue effectively, there is a need to intensify the efforts to raise awareness of elder abuse; improve the knowledge transfer and information dissemination among those who work in the field on best practice, research and intervention strategies; educate and train professionals of different disciplines who interact and provide services to seniors in order to detect abuse, to report it in accordance with protocols, and to take appropriate legal action; implement action plans based on needs and research; increase  the resources for the community responses to elder abuse; and constant review the laws to ensure that adequate protection measures are in place.

However, despite such efforts, there is a need for greater collaboration and coordination between all entities whether in the workplace or the community at large in order to achieve effective results through appropriate detection and prevention tactics.

[i] Kimberly Whaley et. al, Capacity to Marry and the Estate Plan (Aurora: Canada Law Book, 2010) at 70. http://www.canadalawbook.ca.

[ii] Department of Justice, Backgrounder Elder Abuse Legislation, online: http://www.justice.gc.ca/eng/news-nouv/nr-cp/2012/doc_32716.html

[iii] Marie-Therese Connolly et al., The Elder Justice Roadmap: A Stakeholder Initiative to Respond to an Emerging Health, Justice, Financial and Social Crisis 24 (2014). (online)

https://www.justice.gov/file/852851/download

[iv] NICE – Tools for Preventing and Intervening in Situations of Financial Abuse, http://www.nicenet.ca/tools-preventing-and-intervening-in-situations-of-financial-abuse-ontario

[v] Beatrice Britneff  “Scam email impersonating Ottawa city manager tricked treasurer into wiring $128K to fraud supplier”, Global News, April 8, 2019, online: https://globalnews.ca/news/5141545/ottawa-treasurer-tricked-email-city-manager/

[vi] Scott Flaherty  “Dentons Lawyer Wired $2.5 Million to Scam Bank Account in Elaborate Con” The American Lawyer, January 22, 2019, online: https://www.law.com/americanlawyer/2019/01/22/dentons-lawyer-wired-2-5-million-to-scam-bank-account-in-elaborate-con/?slreturn=20190603091236

[vii] White Paper- June 2018- U.S Securities and Exchange Commission, Office of the Investor Advocate: Elder Financial abuse & Elder Financial Exploitation: Why it is a concern, What regulators are doing about it, and looking ahead, written by Stephen Deane, online: https://www.sec.gov/files/elder-financial-exploitation.pdf.

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