Educate yourself and the elderly in your life on how to prevent investment fraud
What is elder financial abuse?
Elder financial abuse is the most common type of elder abuse. It can be confusing to spot because it takes many forms: from being asked to hand over cash or valuables for alleged debts, to “too good to be true” investment opportunities to simply feeling pressured to invest one’s assets.
Here are some common investment scams targeted at the elderly:
A family member, friend or acquaintance introduces a fraudulent opportunity.
Online ads appear on various websites that older adults may visit, such as lottery and investing sites or Facebook. Clicking on the ad will lead to the fraudster’s website, which contains more misleading information on their company and/or investment opportunity. Elders are asked to provide contact information, and once they engage in conversation with a company representative, they risk losing their money to a scam.
Persistent salespeople use aggressive tactics over the phone to pitch genuine-sounding investment opportunities.
Older adults are lured into an educational seminar, provided a free lunch and pitched an “exciting” and “lucrative” investment opportunity. They often feel obligated and pressured to invest because they have accepted the free meal.
Scam artists will take advantage of elders’ generosity by convincing them to donate their money to a non-existent charity or for a cause that could be related to a current event, such as a fire or a flood.
How to protect yourself or the elderly in your life from fraud:
- Keep personal and financial information (PIN, passwords etc.) safe and only share it with trusted individuals.
- Set up automatic payments for bills and deposits into bank accounts and regularly review financial records for anything unusual.
- Be very cautious about opening a joint bank account with family members or other individuals.
- Understand all documents before signing.
- Don’t be coerced into lending money; and if its money you are willing to lend, be sure to get a signed repayment agreement – even if it’s a family member.
- Get legal advice before signing any documents for major financial decisions.
- Appoint a continuing or enduring power of attorney for property to help direct your finances if you find you are unable to do so yourself – but think carefully about who to appoint.
- Introduce your assigned attorney to your legal and financial advisers – create a formal investment policy statement and discuss your wishes together so that there can be no confusion later about how you would want your finances managed.
- Identify a trusted contact – someone other than the attorney, that your legal or financial adviser can contact if they become concerned about your well-being
- Stay connected with family, friends and the community so you don’t become isolated.
How to report elder financial abuse
If you think you or someone you are close with are being taken advantage of financially, ask for help.
Talk to someone you trust, such as a friend, family member, police officer, lawyer, or staff member at your financial institution.
Sometimes, older adults who are experiencing financial abuse may decline help when offered. This could be because of a number of reasons, including:
- A fear of what will happen to themselves or the abuser.
- Family loyalty.
- They don’t know where they can get help.
If an older person you know declines help with an abusive situation, don’t give up. Support their wishes, reassure them that you are here to help, continue to offer support, provide information, and consult with professionals if necessary.
If at any point you are worried about the immediate safety of the older person, contact the police immediately.
What to do if you suspect investment fraud
Contact your local securities regulator to find out what your options are if you think you’ve been approached by a fraudster or to report a potential investment fraud.