Elder Financial Abuse – Recognize it and prevent it

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June 15 is World Elder Abuse Awareness Day and the Alberta Securities Commission (ASC) is encouraging Albertans to be aware of the signs of elder financial abuse.

Elder abuse can manifest in various forms, including physical, emotional, neglect, and financial mistreatment. In Canada, financial abuse is the most prevalent type, often occurring following a crisis, the loss of a loved one, or a decline in physical or mental health, when individuals may be feeling vulnerable and isolated. Unfortunately, identifying financial abuse can be challenging. Financial abuse is often a pattern, rather than a single event, and may happen over a long period of time. It involves the illegal or unauthorized use of someone else’s money or property, which can range from forceful acts like theft or fraud to more subtle forms of pressure or deception. Victims of financial abuse, particularly when it involves friends or family members, may be reluctant to acknowledge or report the abuse, resulting in the abuse going unidentified.

Recognizing Warning Signs of Elder Financial Abuse

Being aware of the warning signs can help loved ones identify potential cases of elder financial abuse. Some signs that a senior may be experiencing financial exploitation include:

  • Unusual financial activity that does not align with their capabilities, such as online banking despite being unfamiliar with computers or making frequent ATM withdrawals despite mobility limitations.
  • Sudden liquidation of investments without a reasonable explanation.
  • Difficulty in contacting the person responsible for managing their finances.
  • Abrupt changes in living arrangements without apparent cause.
  • Emergence of a new close relationship, including romantic involvement, or a sudden shift in emotions towards a person or group.
  • Overly keen interest or involvement in the senior’s financial matters by a friend, family member, or caregiver.
  • Unwillingness to discuss financial matters or an unusual preoccupation with winning lotteries or sweepstakes.

Ways Seniors can Safeguard Their Finances:

Seniors can take proactive steps to protect themselves from financial abuse and support their well-being:

  • Foster social connections: Develop a network of trusted friends and relatives with whom you can openly discuss relationships and financial matters. If you feel someone is intruding excessively, pressuring you, or seeking unwarranted access to your finances, seek support from your trusted network.
  • Stay informed: Thoroughly research investment opportunities or sales pitches before entrusting your money to anyone. Consider consulting a registered financial advisor if you require assistance in managing your finances.
  • Monitor investments: Review financial statements or reports regularly. In case of any unfamiliar account activity, don’t hesitate to ask questions and seek clarification.
  • Appoint a Trusted Contact Person: Consider appointing a Trusted Contact Person. A Trusted Contact Person is someone you’ve given your financial advisor or firm permission to contact should the advisor suspect financial abuse or detect signs of cognitive decline.
  • Be cautious about sharing personal information: Exercise caution when asked to provide copies of sensitive information like driver’s licenses, social insurance numbers, or credit card details. Understand why the information is necessary and how it will be used.
  • Don’t allow anyone to remotely access/control your computer or phone: Be vigilant about protecting your computer or mobile phone from remote access. Be wary of any person trying to persuade you to download a program for your computer or install an app on your phone.
  • Educate yourself about investment scams: visit our Types of investment scams page or reach out to the ASC for information on common investment scams and strategies to avoid them.
  • Understand affinity fraud risks: Even if a close friend or family member recommends an investment opportunity, conduct independent research and don’t succumb to pressure to make immediate decisions.

 

For help or more information on elder financial abuse visit albertaelderabuse.ca

Naming a Trusted Contact Person: Why it Matters

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As we age, we may experience a decline in health or cognitive capacity that could result in difficulty making financial decisions independently. Unfortunately, relying on the help of family members, caregivers and friends can increase the risk of financial exploitation and fraud. One way to safeguard against potential future financial harm is by naming a Trusted Contact Person (TCP).

Who is a Trusted Contact Person?

If you invest with a financial institution or investment firm, your advisor is required to ask you about providing a Trusted Contact Person (TCP). The decision to name a TCP is optional and it’s your choice if you would like to name someone. Providing your advisor with consent to contact your TCP is similar to providing them with an emergency contact. Depending on the consent you provide, your advisor could contact your TCP in the following circumstances:

  • You cannot be reached after repeated attempts and where failure to contact you would be unusual
  • The advisor has concerns you are being financially exploited
  • The advisor has concerns about mental capacity as it relates to your ability to make financial decisions
  • Your advisor needs confirmation of your legal representative (e.g. power of attorney, executor, trustee)

For example, your advisor may contact your TCP when they cannot reach you because you have taken an extended vacation and forgot to inform them. Or, in more sensitive situations, your advisor may contact your TCP to ensure the validity of a request that they believe is out of character.

What can and can’t my Trusted Contact Person do?

A TCP’s sole purpose is to help safeguard your financial assets by being an additional resource to help your advisor make decisions that best protect your account. Your advisor might contact your TCP to discuss:

  • Concerns about your mental capacity and ability to make financial decisions
  • Signs of financial mistreatment or abuse they’ve observed
  • Concerns that you are being scammed

Your TCP is different than a power of attorney. A TCP is not permitted to manage your finances or make financial decisions on your behalf.

Who should be your Trusted Contact Person?

A TCP should be a mature family member or friend who you trust, and you should feel comfortable that they can handle difficult conversations about your personal situation if they arise. Consider choosing someone you know will protect your interests, is familiar with your support network, and is not typically involved in your financial decisions. You should also ensure the person you select agrees to take on the role and is comfortable talking to your advisor.

While naming a TCP on your account is optional and not a legal process, it can provide you valuable peace of mind knowing that your advisor has someone you trust to help safeguard your financial assets now and in the future.

To learn more about assigning a TCP to your accounts, please visit our Investing as you age page or speak to your registered advisor.