Financial exploitation and senior citizen fraud

26 February 2021 by National Bank
Senior citizen fraud

The phone rings. The caller says they’re a customer service representative from your bank. They claim that your bank account has been compromised and need your PIN to confirm your identity. They recommend that you drop your debit card in your mailbox so they can send you a new one. A few hours later, they take your card and proceed to make withdrawals. Would you have fallen into this trap?

What is senior citizen fraud?

Senior citizen fraud, or financial exploitation of the elderly, is when a scammer tries to financially abuse a vulnerable individual. Whether by phone, by mail, or on social media, fraudsters show ingenuity in the ways they squeeze money out of people – particularly the elderly – and commit financial abuse. It’s important to be able to detect the red flags in order to protect yourself and avoid being a victim of exploitation.

What are the techniques of financial fraud?

1. Telemarketing scams

This is a strategy in which cybercriminals contact a person and get them to make a remote transaction. A few years ago they contacted people mostly by phone, but these days, telemarketing scams can be done by email, text message, or any other communication channel.

Here’s an example: you receive an unwanted call. An automated voice congratulates you for having won a cruise to the Caribbean. If you pay a fee to save your spot, you can set sail as soon as you can. The catch? You never entered a contest to win a cruise trip. As a good-hearted person, you’re tempted to make the transaction. However, this is a common fraud technique that would lead you to being shortchanged.

2. Romance scams

Rather than trying to sell you a product or service, the scammer seeks to befriend their victim, and eventually make them fall in love with them. It’s a long con that will lead to the fraudster claiming to need your help.

Here’s how it usually goes: the fraudster finds a vulnerable individual, starts talking to them, and slowly builds a relationship of trust with them. Scammers can learn a lot about you by looking at your social media. They can view your interests, read your status updates, and figure out your needs and desires. They look for single people and exploit their vulnerabilities, hence the importance of adopting good habits when it comes to cybersecurity.

Once they’ve established trust, that’s when the fraudster hits. They’ll come up with a ruse and feign needing help. They may claim to have financial problems and ask that you send them some money to help them make ends meet. Or they may take advantage of your generosity and say that they want to meet you in person, but need travel money to come see you.

3. Grandparent scams

Also called grandchild scams, this type of fraud incites a vulnerable individual to make an urgent financial transaction in order to help a loved one who they believe is in trouble. Your emotions, your family relationships and, most of all, guilt all come into play. The fraudster contacts an elderly person by phone and pretends to be their grandchild. They avoid using the grandchild’s name, making the victim guess and provide it themselves. As the conversation continues, the scammer convinces the victim that they are truly talking to their family member.

Here’s the most common scenario: “I just got into an accident and I’m going to need a lawyer. I don’t want Mom or Dad to find out. That’s why I called you. I need $5,000 by the end of the day, otherwise I might go to jail.” If the crook gets the answer they’re looking for, then they ask their victim to send the money to a bank account, claiming that it’s the lawyer’s trust account. This scam really plays on urgency to get the victim to comply.

How do you detect a fraud attempt?

There are many signs that can help you figure out if a fraudster is trying to scam you:

  • Is this an unsolicited communication?
    Were you expecting someone like them to contact you? If the person is reaching out on behalf of a company, are they calling you during regular business hours?
  • Does it feel urgent?
    Cybercriminals want to throw you off-balance, play with your emotions, and pressure you to prevent you from acting rationally.
  • Does the financial gain seem exaggerated?
    In other words, does the return on investment seem too good to be true? Take the example of inheritance fraud, where a scammer contacts you claiming that you’ve been chosen to settle an estate worth several million dollars.
  • Is there an element of confidentiality around the transaction?
    Fraudsters insist that you refrain from sharing anything about the situation with your loved ones, lest they dissuade you from acting.
  • Finally, if the person claims to work for a business, company or bank, are they using the communication method they usually use to contact you?
    Keep in mind that your communication preferences are registered with the companies you do business with. For example, on the Canada Revenue Agency’s website, it says that they usually send you your notice of assessment or reassessment by mail. Should they contact you by phone, please note that they wouldn’t be aggressive or menacing. They wouldn’t leave you any alarming voicemails asking you for personal or financial details, either.

How do you protect yourself from financial fraud?

Cybercriminals are actors, in a way. They’re prepared and put on a performance to take advantage of your good faith. Doubt is your greatest asset in protecting yourself from bank fraud; don’t be hesitant to ask questions. Heightened vigilance will help you detect when someone is putting on an act. Then, you can do what you need to in order to protect yourself.

  • Major organizations have protocols dictating that employees contacting clients should never ask for information such as their social insurance number or PIN.
    If someone asks you for this information, hang up right away. If the call is truly important, the person will call back and leave a message with their contact information. Meanwhile, you can check their legitimacy or talk it over with someone you trust.
  • Find out everything you can about the transaction and avoid agreeing to anything during the call.
    Instead, ask that they send you the documentation in writing, under the guise of needing time to think it over. Are they asking for your address? That’s another hint that they may be trying to defraud you if the caller is supposed to have it already.
  • Never answer a question to which the other person should know the answer.
    For example, don’t offer up any names before they identify themselves. Don’t be afraid to offend them by saying that you don’t recognize their voice and asking for their name.
  • Similarly, do not share any sensitive information that the other person should already have access to.
    Your bank wouldn’t call you to ask for your birth date, social insurance number, or debit card PIN. Ask yourself why that person would need these personal details from you.
  • Verify the legitimacy of all calls yourself.
    You could contact other members of your family if you think you may be a victim of a grandparent scam. If a caller claims to be contacting you from your bank, you could call back using the number on the back of your debit card.
  • Finally, if a stranger calls, congratulating you for having won a contest, be on your guard.
    Did you enter that contest? If you’re unsure, ask the caller to provide you with more information, like the address of the organizer and where to read the contest details in order to verify its legitimacy. If you need to pay a fee to claim the prize, that’s a red flag. Keep in mind that there is Canadian legislature that regulates advertising contests. You can also flag any instances of fraudulent contests to Competition Bureau Canada.

What are some helpful resources?

If you think you’ve been a victim of financial exploitation, don’t feel bad. This kind of thing can happen to anyone. Here’s what you can do to report the issue:

  • Call your bank and ask to be forwarded to the fraud department.
  • Contact the Canadian Anti-Fraud Centre, which operates in all provinces.
  • If you think it’s a case of abuse, contact your local police station.

Whether you need it yourself or if it’s for a loved one, there are many resources to help protect you from fraud. Here are some external websites that could be useful both before and after the fact:

Think you know an elderly person who’s been a victim of fraud? Check out the It’s Not Right! initiative, which offers advice and strategies to get a handle on the situation.

For more advice and resources, check out our Protection for Seniors portal. For your questions, we're here to help.

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