The statistics tell the story: Canada’s population is aging.
The baby boom generation, which is now starting to enter their retirement years, represents one third of Canada’s population of more than 31 million, and 20 per cent of the population will be over 65 by the year 2020.
At the same time, baby boomers are in better financial health than their previous generation and are living longer thanks to advances in medicine and greater awareness about health issues and lifestyles.
“This is all great news for the aging generation, but it hasn’t gone unnoticed by the criminals who love to target seniors and their assets,” said Graham McWaters, co-author of The Canadian Guide to Protecting Yourself from Identity Theft and Other Fraud.
“Seniors have been targeted by fraudsters for many years and it doesn’t appear as though this situation is subsiding. In North America, nearly 30 per cent of all fraud victims are seniors.”
Fraud is the number 1 crime against seniors.
Seniors are an easier target than other demographic groups because they often live at home and alone, and they have more savings, assets and disposable income. Seniors tend to be more trusting than younger people and many seniors do not report losing their money to a con artist because they are embarrassed at having being deceived.
Older Canadians are targeted with a variety of scams such as fraudulent sweepstakes or lotteries, investments promising inflated returns, charitable solicitations, multi-level marketing schemes, funeral plans, and home repair, medical and real estate fraud.
In hard economic times like these, older Canadians may fall prey to schemes that promise to give them access to money that is tied up in locked-in retirement accounts.
The money is withdrawn and given to a promoter who invests it in a stock or investment that turns out to be worthless.
The investor not only loses the money, but may end up paying a heavy tax penalty for removing it from a locked-in account.
Canadian Securities Administrators (CSA), a council of 13 securities regulators in Canada’s provinces and territories, said older Canadians often are the target of complex investment scams that promise inflated returns.
“These products can sound tempting to older Canadians who’ve seen their retirement accounts dwindle and who, after retirement, have little or no opportunity recoup financial losses,” the CSA said.
“Unrealistic expectations can set the stage for further losses.”
Two years ago, the Ontario government introduced a number of legislative initiatives designed to help protect seniors from identity theft and real estate and other fraud.
Among other things, the legislation protected properties from being lost due to the registration of a falsified mortgage, fraudulent sales or a counterfeit power of attorney, and increased fines for real estate fraud to $50,000 from $1,000.
Fraud through the Internet isn’t too much of a problem right now for Canadians over 65 because many of them are not computer savvy.
But it will be when the baby boomers start reaching that age.
“Most people 65 or older do not go online very much, but when the Internet-loving baby boomers start to turn 65, there will be an online ‘silver tsunami’,” said McWaters.
The CSA said the best way for seniors to protect their money from scams and fraud is through education and by taking an active role in investing their money.
It recommends seniors consult a variety of credible sources of investment information, understand an investment before they put their money into it, and understand how their investments relate to their goals and objectives.
“Your investment choices should be a reflection of your goals and lifestyle,” the CSA said.
“If something happens in your life, make sure you re-visit your investment goals and objectives and make sure to update your adviser. Your investment decisions during retirement will look different from those you made in your 20s.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contacted at boggsyourmoney@rogers.com.