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Help prevent financial abuse against seniors with these cautionary tips
'Hello Grandma?' These two words could cost you your life savings
Actor Mickey Rooney, philanthropist Brooke Astor and an 87-year-old grandmother from Burnaby (let’s call her “Barbara”) share an embarrassing and expensive secret.
They are all elderly victims of financial abuse – Rooney and Astor by a family member, and Barbara by a complete stranger. Rooney’s stepson allegedly took control of Rooney’s money and forced him to live in poverty. Astor’s son tried to take control of her immense fortune after she developed Alzheimer’s disease. And Barbara lost her life savings in what is being called the “grandparents scam.”
Barbara lives at a seniors’ residence in Burnaby. Early in 2012, the residence was targeted by a group of scammers. They made a series of phone calls to the facility and, unfortunately, got through to Barbara.
They used what has become a well-known trick to get seniors to send money. They told her it was her “grandson” calling, that he was in Montreal and needed money desperately. He’d been arrested for drunk driving – but didn’t want his parents to find out. Barbara, eager to help, quickly sent the cash he requested.
The calls kept coming. The “grandson” needed money for a lawyer, then car repairs, then more money to pay a fine. Each time, Barbara went to the nearby bank and withdrew money from her savings to send to her “grandson,” believing that she was helping him. When she’d drained her savings account, her bank gave the elderly woman a line of credit, which she used to send even more money to the scammers.
She always withdrew a little bit at a time. Her family thinks the scammers told her to do it in small amounts so it wouldn’t draw attention. By the time Barbara’s son found out, his mother had sent more than $20,000 to an obscure address in Toronto. On several occasions, the scammers even sent a UPS delivery person to Barbara’s seniors’ residence to pick up the cash.
Barbara’s private pain, and Rooney and Astor’s far more public troubles, are only three examples of a disturbing trend: financial abuse of elders is on the rise.
There are no reliable statistics on such scams in Canada. However, in the US, the annual financial loss by victims of elder financial abuse in 2010 was estimated to be at least $3 billion, a 12 per cent increase from the $2.6 billion estimated in 2008.*
Fake lotteries, fake charities, phishing, dating scams, miracle cures. There are so many types of fraud that Canada’s Competition Bureau has produced The Little Black Book of Scams. It’s filled with examples of how everyone, and especially seniors, can be tricked, swindled, duped, defrauded, faked and romanced out of their life savings. All this by an increasingly sophisticated and web-savvy group of criminals who prey on people’s weaknesses and exploit their good will.
These scams have become increasingly common. In 2009, the Federal Trade Commission (FTC) recorded 743 incidences of scammers impersonating a family member or friend in need of money. Since 2010, the FTC has recorded more than 40,000 scams, and it’s estimated that many more go unreported.
Everyone with an email account knows about the Nigerian banking scams that have been circulating the Internet for years. They seem almost laughable now. But for many seniors whose judgment may be compromised by age or disease, and whose experience on the web is limited, these scams still pose a real threat.
Martha Jane Lewis, executive director of the BC Centre for Elder Advocacy and Support (BCCEAS), says elder abuse is a huge problem and it’s growing. “Statistics for Canada are almost non-existent. But we estimate that one per cent of seniors report experiencing some form of physical abuse and eight per cent report experiencing financial abuse.”
According to Lewis, the reason for this growth is two-fold. First, it’s simple demography – the number of seniors is exploding. Second, seniors are living longer, and need to save more than ever before for their retirement. Even large pension funds are not prepared for the reality of people being retired for more than 40 years. Many baby boomers now facing retirement haven’t saved like their parents. They have far less money and don’t have a company pension plan to fall back on. As a society, we do not always recognize the sometimes desperate conditions this vulnerable population must endure.
A burgeoning senior population, many of whom grow more desperate as they face the reality of a long retirement, is particularly susceptible to risk-taking and scams that promise unreal financial returns – and why, for fraudsters, business is booming.
Since 1994, BCCEAS has worked to prevent elder abuse by providing education, support, advocacy and legal representation to older adults. Three lawyers and a legal advocate run a law clinic for marginalized and low-income older adults. BCCEAS also has a victim services pro- gram, and recently expanded the hours of operation for its Seniors Abuse and Information Line.
BCCEAS offers educational workshops for elders in four areas:
1) frauds and scams;
2) abuse around power of attorney and joint bank accounts;
3) building community connections; and
4) bullying in residential care.
With a recent Health and Social Development grant of $36,500 from Vancouver Foundation, the Centre is planning to expand these outreach efforts. BCCEAS will train five volunteers from each of 10 agencies (including MOSAIC, the South Granville Seniors Centre, the Minoru Seniors Centre, the Council of Seniors, Better at Home and United Way), delivering 50 educational workshops. These volunteers will then train others in their networks, and the knowledge will spread.
“We’re here to help people,” says Lewis. “Our goal is to get this important information out as widely as possible. We don’t have the connections these other agencies have. We are here as a resource, supporting other agencies to become educated and to share the information in their own community.
“In the coming years, we must cope with an aging population, and all that entails. It’s a massive challenge.
“We have to educate elders about their rights, and the harsh realties they may face. And we have to tell younger Canadians, ‘Don’t feel entitled to get your parents’ money while they are still alive.’ Power of attorney is not a legal instrument to spend your parents’ money before they’re dead.” -VF
Words to the wise
Help prevent elder abuse with these cautionary tips (and share them with any seniors you think could be at risk):
Limit the personal information (e.g., vacation plans) you put on the Internet (scammers troll sites like Facebook to gather personal information).
Be suspicious of anyone who calls unexpectedly asking for cash.
Verify any supposed emergency by calling friends and family before wiring money.
Create a secret code or password with family members that can be used to verify a true emergency.
By Paul Heraty