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If a senior client or clients have already been scammed, they might feel embarrassed. They need to be reassured that they’re far from alone.

fizkes/iStockPhoto / Getty Images

A few months before the COVID-19 pandemic shut down in-person events, Janet Gray, certified financial planner and money coach with Money Coaches Canada in Ottawa, hosted a financial education session for a group of 25 seniors to show them all the ways financial fraudsters are using technology to swindle people out of their money.

Specifically, she covered topics such as e-mail phishing scams and telephone calls from so-called government agencies. Urgent-sounding text messages from fake family members asking for cash were also discussed – not to mention the plethora of ways scammers are stealing identities through online hacking.

When the event concluded, two senior women who had attended approached Ms. Gray and told her they were past victims of financial fraud and had lost significant money as a result.

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“They recovered and lived to tell about it,” she says now, describing the women as relatively independent and computer-savvy – not the stereotypical elderly financial abuse victims one might imagine. “But it was heartbreaking.”

While anyone can be at risk when it comes to identity theft and financial fraud, seniors tend to be the most vulnerable and heavily targeted by strangers looking to make a buck illegally. The pandemic has only made things worse.

In the U.S., data from the Federal Trade Commission (FTC) show there was a surge in reports from people about losing money to scams in 2020, with the number of complaints about scams that started on social media more than tripling in the past year. In fact, the FTC pointed out that people reported losing more than US$117 million to this type of fraud in the first six months of 2020 compared with US$134 million for all of 2019.

A similar picture emerged in Canada. Statistics Canada released the results of a survey showing that 42 per cent of Canadians have experienced at least one type of cybersecurity incident since the beginning of the pandemic, including malware attacks and hacked accounts. Of those targeted, 36 per cent said they lost time, data or money.

Laura Tamblyn Watts, chief executive officer of CanAge, a national seniors’ advocacy group, who also teaches a course on law and aging at the University of Toronto, isn’t surprised that so many people, particularly seniors, have become victims in the past year.

She says fraudsters are tech-savvy, malicious, and incredibly well-organized. She calls the world they inhabit a “shadow capital market” in which personal data is bought and sold.

“There are entire boiler rooms of lists of people who have been taken in by external fraudulent scams,” Ms. Tamblyn Watts says. “If you get taken in once, your chances of being exploited and targeted again are extremely high.”

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So, how can financial advisors keep clients, seniors, in particular, and their assets safe against those who prey on them, not only once, but multiple times? How can you help clients become better at spotting such nefarious activity? Here are four ways to get started:

1. Understand their vulnerabilities

There are two main reasons that seniors are often targets of fraud: They’ve amassed more wealth than younger people and are more likely to be living alone and feeling lonely, Ms. Gray says.

That isolation has only been made worse during the pandemic, not just for those who are elderly, but for everyone.

“We’re longing for that human contact,” she says. “Now, when someone phones it’s like, ‘Yeah, sure. I’ll talk to you for an hour and a half.’”

Studies suggest that seniors tend to be more trusting than younger people and are also more respectful of authority figures. Then, there’s the general loss of good financial decision-making related to age.

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But don’t assume it’s only clients in their 80s and 90s who aren’t as financially astute as they once were. One well-regarded Brookings Institution study revealed that people make the least financial mistakes, on average, at 53 years old. Then, the ability to handle money starts to decline, although at different rates for everyone.

2. Make a list of vulnerable clients

Knowing these facts, Ms. Gray says it’s important to make a list of the most vulnerable clients. Maybe they live alone or aren’t particularly computer savvy.

Or, conversely, perhaps you’ve talked to them in the past about their penchant for spending large amounts of time online and purchasing items from sketchy social media ads – one of the top scams during the pandemic, Statistics Canada data show.

“Look at their accounts and contact these clients more regularly,” she says.

3. Coach them

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You don’t have to set up a long or formal meeting to give clients information about staying safe from predators, but coaching people on how to deal with them is important.

Take answering the phone. Encourage vulnerable clients to never answer by saying their name. A simple hello will do. And if they receive an automated call that requires them to say, “Yes,” they should hang up.

Ms. Tamblyn Watts says some scammers try to record people’s voices so they can use them to maneuver through automated government or financial institution phone systems.

If you alert clients to this practice, they’ll feel more comfortable hanging up the phone – even if it goes against their instinct to be polite.

But above all else, coach every client to get annual copies of their credit report from Equifax Canada and TransUnion Canada. If they’re unsure what the data tell them, be ready to explain.

4. Report instances of fraud

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If a client or clients have already been scammed, they might feel embarrassed. Reassure them they’re far from alone – and even point to recent data to make your point.

Then, help them report the fraud to the local police and the Canadian Anti-Fraud Centre, as well as other relevant institutions from government agencies to banks and Canada Post, depending on the nature of the scam.

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